Dr Ernest Addison
THE CENTRAL Bank has reiterated that the benefits of the financial sector clean up far exceeded any harm that may have been caused.
Research Director at the Bank of
Ghana (BoG), Philip Abradu-Otoo, who spoke on behalf of the Governor of BoG, at
a forum organized by the Private Newspaper Publishers Association of Ghana
(PRINPAG), recently in Ho, said the exercise had succeeded in safeguarding
depositors’ funds, won back the financial stability and confidence in the
sector and repositioned the industry to support the country’s economic
transformation.
He said the central bank was a
meticulous institution which played a very sensitive role in the economy and
therefore it considered the advantages and disadvantages of the exercise before
carrying that out.
He commended the media for its
support in ensuring that there was constant communication and dissemination of
information from the bank to the public and vice versa in such a manner that
did not harm the sector.
Successes chalked
Elaborating on the successes chalked
from the clean-up and reforms, Natalia Lawson, an economist at the Research
Department of BoG said, performance in the banking sector had become stronger
after the clean-up and reforms.
She said currently total assets of
the banking sector (with 23 banks) stood at GH¢121.0 billion as at October 2019,
as against GH¢89.1 billion (with 36 banks) prior to the reforms in 2017.
She also dispelled the notion that
confidence in the sector had declined, saying total deposits have increased
from GH¢55.7 billion (with 36 banks) compared to GH¢78.9 billion (with 23
banks). This shows “a stronger deposit base owing to more trust and confidence
in the banking sector.”
Lawson said the ratio of banks
capital to their risk was well above the regulatory limit of 13% to 18.9% as at
October 2019.
“There has also been a decline in non-performing loans from 21.9% as at 2017, to 17.3% as at October 2019; proof that banks have improved loan recovery efforts.”
From Fred Duodu, Ho ([email protected])
