Mr Ebenezer Ashley, Executive Head, Research, Business Intelligence and Market Conduct of the Ghana Association of Banks (GAB), has intimated that the banking industry projects a positive outlook in the immediate medium and long term.

Mr Ebenezer Ashley, thus, argued that banks in the country are strategically positioned to resist any potential economic shocks and financial crises. This, he explained that would be done through improved operational performance and adequate capitalization towards economic stimulation.

“Institutions in the banking industry are strategically positioned to better withstand potential episodes of financial stress while providing improved financial services to people within the economy and beyond. Undoubtedly, the banking industry projects a positive outlook in the immediate medium and long term.”
Mr Ebenezer Ashley

Mr Ashley made this known while highlighting the performances of the banking industry in the first half of 2023. He noted that the sustained growth in deposits and higher capital levels speak to the potential for financial deepening and credit growth.

The Executive Head asserted that sustained reforms and operating strategies reflected in the profitable, sound, solvent, and resilient banking industry, which remained ready to anchor accelerated growth through prudent lending to individuals and businesses in key and strategic sectors of the Ghanaian economy.

Mr Ashley iterated that banks operating in the country are responding positively to the economic recovery and are ready to transact business with well-meaning Ghanaians including individuals, households and various categories of businesses, especially small and medium-sized enterprises (SMEs). “Indeed, the resilience of banks remains robust as evidenced in the industry’s spectacular performance during the first half of 2023,” he said.

The Accelerated Pace of the Industry’s Recovery

The Executive Head mentioned that Prudential Financial data released by the banks during the first half of 2023 attested to the accelerated pace of the industry’s recovery from the shackles of the recent debt restructuring programme. “The industry’s aggregated balance sheet during the Q2 of 2023 depicted impressive performance compared to Q2 of 2022, where the GHȼ242.4 billion recorded in the Q2 of 2023 fairly reflected robust growth in total assets,” he said.

The executive head said financial intermediation was enhanced by the boost in total advances, which increased from GHȼ63.4 billion during the second quarter of 2022 to GHȼ73.1 billion during the second quarter of 2023, representing 15.30 per cent growth during the period. He added that the industry’s core liquid assets to total assets ratio increased to 27.70 per cent in Q2 of 2023 from 23.40 per cent during Q2 of 2022.

Mr Ashley averred that the effects of the government’s debt restructuring programme on the broader economy were reflected in the industry’s high non-performing loans (NPLs) ratio in 2023 Q2 as 18.70 per cent compared to 2022 Q2 as 14.10 per cent. “The implication is that conscious efforts of the government towards practical implementation of programmes that would enhance economic stimulation are needed to stem the tide of loan defaults,” he stressed.

Mr Ashley noted that these developments are indicative of the positive strategic measures rolled out by the banks to control costs while maximising revenues and profits to achieve organisational targets and objectives. “The banks are not oblivious of their critical role in preserving the stability of the country’s financial system and therefore, are consistently dialoguing and collaborating with the Bank of Ghana and other key stakeholders to ensure sustained stability of the banking industry,” he said.