Dr. Henry Kofi Wampah, Governor, Bank of Ghana
Total assets of banks increased to GH¢42.9 billion from GH¢32.1 billion last year, representing a 44.4 percent increase year-on-year.
The asset growth, which was on the back of advances, accounted for 45.1 percent and was funded largely by deposits which shot up by 32.5 percent year-on-year.
Dr. Henry Kofi Wampah, Governor, Bank of Ghana (BoG), who made this known at a press briefing recently, said the banking sector remained sound and continues to expand.
He said Non-Performing Loans (NPLs) ratio declined to 12.8 percent in May 2014 compared to 13.4 percent in May 2013.
However, NPLs (less loss provisioning) ratio remained broadly unchanged at 5.3 percent.
Dr. Wampah said the Capital Adequacy Ratio of banks declined to 16.7 percent in May 2014 from 18.1 percent in May 2013 on account of increased credit delivery but remained above the regulatory benchmark of 10 percent.
However, he said the credit conditions survey conducted in June 2014 suggests tightening of credit stance for most loan types, including consumer credit, SMEs, large enterprises and short-term loans.
Dr. Wampah said private sector credit went up by 47.2 percent year-on-year to GH¢18.9 billion in May 2014 compared to 31.2 percent in May 2013.
‘In real terms, the annual growth in credit to the private sector was 28.2 percent at end of May 2014 against 18.4 percent a year earlier. The rapid expansion in credit allocation by banks was funded largely from increased deposits,’ he said.
Dr. Wampah said interest rates on the money market generally moved upwards in tandem with the Bank’s tight monetary policy stance.
He said between December 2013 and May 2014, the 91-day Treasury bill rate moved from 19.2 percent to 24.1 percent; the 182-day Treasury bill rate rose from 18.7 percent to 21.3 percent, and the 1-year note went up from 17 percent to 22.5 percent
Dr. Wampah said the 2-year note increased from 16.8 percent to 23 percent and the 3-year bond increased from 19.2 percent to 25.5 percent.
This, he said, has however gone down to 24.4 percent in June, stating that the 5-year bond increased from 19 percent to 23 percent.
Dr. Wampah said the average lending rates of banks rose to 27.9 percent in May 2014 from 25.6 percent in December 2013.
The average rate on 3-month term deposits remained unchanged at 12.5 percent.
By Cephas Larbi
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