The total market share of the five biggest banks in the country has declined further from 49.5% in 2009 to the region of 45% by December 2010, indicating increasing competition in the industry.<\/p>\n
Before 2009, the five largest banks controlled more than half of the industry\u2019s assets, accounting for 56% in 2007 and 52% in 2008; but their combined share of the market has tumbled to below half \u2013 due to above average expansion in the lower ranks, and a new entrants have come in.<\/p>\n
Ghana Commercial Bank (GCB) remains the biggest bank and now owns 12.1% of the industry\u2019s assets. Standard Chartered Bank follows with 9.6% of total assets, after toppling Barclays, whose share fell much more \u2013 from 10.8% to 9.4%. Ecobank Ghana and Agricultural Development Bank (ADB) are the fourth \u2013 and fifth \u2013 largest banks with respective shares of 8.7% and 5.9%.<\/p>\n
Among the biggest five, Stanchart recorded the highest return per unit of asset in 2010 with return-on-average assets topping 4.3%. GCB\u2019s return-on-average assets are the lowest in the group-rising from 1% to 2.8% last year.<\/p>\n
The top-five\u2019s share of industry deposits also dipped to 45.8% from 48.7% in 2009. Customer deposits held in the banking system grew by 32% from GH\u00a28.97 billion to GH\u00a211.82 billion, according to official data from the Central Bank. Foreign currency deposits were about one-quarter of total deposits in 2010.<\/p>\n
Nearly GH\u00a28 billion was advanced in loans to customers by banks last year. Of this amount, 37% was granted by the top-five-a decline from 44% of total loans and advances in 2009. The total gross loans reported on the balance sheets of the five biggest banks was GH\u00a22.98 billion, down from GH\u00a23.02 billion in 2009.<\/p>\n
The drop in market share notwithstanding, there has been a steady and consistent increase in the size of each bank\u2019s balance sheet over the years, together with improved deposit mobilisation and financial intermediation.<\/p>\n
Other measures of competition \u2013 the Herfindahl Index and Gini Concentration Index \u2013 have improved as well, the Central Bank showed in an industry report. The two indices,<\/p>\n
Which fell with increasing competition, shed points again after a decade of consistent decline.<\/p>\n
Also, an official release from the Bank of Ghana on Treasury developments said an auction last week of three-year fixed-rate bonds for the government was oversubscribed by 163%.<\/p>\n
The Central Bank, which issued the bond on behalf of the government, said it sold the total amount of GH\u00a2320 million on offer, but received tenders worth GH\u00a2840.79 million from bidders.<\/p>\n
The bonds were sold at a uniform allocation rate of 12.39%, which is the maximum coupon rate payable on all bids. Both resident and foreign investors bought this tranche of securities.<\/p>\n
Central Bank figures show foreign investors\u2019 holdings of outstanding government securities increased to 20% of the total by the end of January 2011, double the proportion that they held 12 months earlier. About 55% of securities were held in the banking system, including 2% held by the regulator.<\/p>\n
Government debt in developing economies, such as Ghana, appeal strongly to global investors because of the relatively higher yields and growing confidence in these increasingly stable economies.<\/p>\n
A second attraction is the relative stability of the local currency as foreign investors, upon redemption, look to buy back the dollars that they exchanged to purchase these bonds.<\/p>\n<\/div>\n
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