• About
  • Advertise
  • Privacy Policy
  • Contact
Tuesday, May 17, 2022
  • Login
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
No Result
View All Result
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
No Result
View All Result
The Vaultz News
No Result
View All Result

Commercial Banks Show Growing Appetite for Government Securities, Foreign Assets

October 29, 2021
Stephen KotochiebyStephen Kotochie
in Banking, Finance, One Top Story
0
Commercial Banks Show Growing Appetite for Government Securities, Foreign Assets

Dr. Ernest Addison - Governor of the Bank of Ghana

Flow of Funds of Commercial Banks in the country is massively skewed towards investment in Government securities, foreign assets and balances with Bank of Ghana (BoG) to the detriment of credit allocation to the private sector.

The provisional figures for the second quarter of 2021 showed that the proportion of commercial banks’ funds allocated to investment in Government securities, foreign assets and balances with Bank of Ghana increased, while proportion of funds allocated to bank credit, and other assets decreased relative to that of the corresponding quarter in 2020.

According to the Bank of Ghana, the proportion of banks’ funds allocated to Government securities increased significantly to 53.9 percent in Q2 2021, up from 45.5 percent recorded in Q2 2020. The BoG attributed this to “an increase in the proportion of funds flow to investments in both short-term and medium- to long-term securities”.

RelatedPosts

Formulate Policies on Aging By Leveraging Available Data- Head of Demographics Statistics

NBC Ghana Trust Launches New Pension Product, Sets to Enroll 100,000 Workers

Fidelity Bank launches ‘Yenko Dubai’ Promo for its agents

The proportion of fund flows allocated to investment in short-term bills increased from 4.7 percent in Q2 2020 to 6.7 percent in Q2 2021, while the proportion of fund flows to investment in medium-to-long-term Government instruments increased from 40.8 percent to 47.2 percent over the same comparative quarters.

Similarly, BoG disclosed that the proportion of fund flows to foreign assets and balances with Bank of Ghana increased to 2.5 percent and 19.0 percent, respectively in Q2 2021 from 0.4 percent and 8.5 percent respectively in Q2 2020

Decrease in fund flows to bank credit

The BoG, in its Second Quarter Bulletin, highlighted that the proportion of fund flows to bank credit, however, decreased to 9.7 percent at the end of Q2 2021, from 23.6 percent in Q2 2020. This was also lower than the 11.4 percent recorded in Q4 2020 and 10.2 percent realized in Q1 2021. Similarly, the proportion of fund flows to other assets decreased to 14.9 percent in Q2 2021, from 22.0 percent over the same comparative period.

This demonstrates the continuous crowding-out of private sector investment due to the Commercial Banks’ growing appetite to hold government securities. Major international institutions, especially the IMF, have cautioned against this practice, which they believe, has devastating impacts on the growth of the economy.

Sources of funds for Banks

According to the BoG, deposits are the main source of funds for financing of banks’ assets. BoG revealed that the share of deposits in the sources of funds of commercial banks increased to 64.2 percent in Q2 2021, from 47.5 percent in Q2 2020. This compares with 89.0 percent recorded in the last quarter of 2020 and 82.2 percent in Q1 2021.

“The increase in flows from total deposit for the period under review, was due to increases in fund flows from both domestic currency deposits and foreign currency deposits”.

Bank of Ghana

The proportion of fund flows from domestic deposits increased from 36.2 percent in Q2 2020 to 48.6 percent in Q2 2021. Component analysis of flow of funds showed that demand, savings and time deposits all accounted for the increased flows from domestic currency deposits during the review period, the BoG stated.

Similarly, the share of funds from foreign deposits increased from 11.4 percent in Q2 2020 to 15.6 percent in Q2 2021. This signals increased use of foreign currencies in the country.

READ ALSO: SIL Sensitizes Farmers On Technology-Driven Soybean Production

Tags: Bank of Ghanacommercial banksForeign AssetsGovernment SecuritiesIMF

Send your news stories to [email protected] and via WhatsApp on +233543050759.

Related Posts

Formulate Policies on Aging By Leveraging Available Data- Head of Demographics Statistics
Pension

Formulate Policies on Aging By Leveraging Available Data- Head of Demographics Statistics

May 17, 2022
NBC Ghana Trust Launches New Pension Product, Sets to Enroll 100,000 Workers
Pension

NBC Ghana Trust Launches New Pension Product, Sets to Enroll 100,000 Workers

May 16, 2022
Fidelity Bank launches ‘Yenko Dubai’ Promo for its agents
Banking

Fidelity Bank launches ‘Yenko Dubai’ Promo for its agents

May 16, 2022
Introduce Cash Transfer Scheme To Cushion Citizens Against Rising Cost of Living - Dr. Opoku
Economy

Introduce Cash Transfer Scheme To Cushion Citizens Against Rising Cost of Living –  Dr. Opoku

May 17, 2022
Sanlam Partners Allianz to Create African Insurance Giant
Insurance

Sanlam Partners Allianz to Create African Insurance Giant

May 13, 2022
I Have Given Up All Hope In This Government — Economist
Economy

I Have Given Up All Hope On This Government — Economist

May 13, 2022

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Previous Post

NDC vows to pursue Inno-Link’s printing of one million ballot papers claims

Next Post

Mintah Akandoh calls for domestically raised funds to sustain immunization efforts

Sign up for The Vaultz analytic wire

Get weekly news analysis from top editors at The Vaultz and stay informed on trending economic and business issues from across the globe.
Formulate Policies on Aging By Leveraging Available Data- Head of Demographics Statistics
Pension

Formulate Policies on Aging By Leveraging Available Data- Head of Demographics Statistics

by Stephen M.CMay 17, 2022
Passenger Who Landed Plane Without Experience Shares His Story As His Identity Is Revealed
Entertainment

Passenger Who Landed Plane Without Experience Shares His Story As His Identity Is Revealed

by Dorcas DamehMay 17, 2022
Ghana Named Among 3 African Countries Likely To Hike Policy Rate This Month
Economy

Ghana Among 3 African Countries Likely To Hike Policy Rate In May

by Stephen KotochieMay 17, 2022
Take Pig Farming as a Business- Pig Farmers Association
Agribusiness

Take Pig Farming as a Business- Pig Farmers Association

by Deborah Dzifah TamakloeMay 17, 2022
General Secretary for Ghana Association of Private Schools (GNAPS), Justice King Essie, has revealed that the Ghana Education Service (GES), can no longer become the body in charge of school placement in the country.
General News

We Have Our Education In Crisis- Kwame Dagbandow

by Angeller AshongMay 17, 2022
NATO Commenses its Military Exercises in Baltics
Europe

NATO Commenses its Military Exercises in Baltics

by Edem NyonatorMay 16, 2022
Formulate Policies on Aging By Leveraging Available Data- Head of Demographics Statistics
Passenger Who Landed Plane Without Experience Shares His Story As His Identity Is Revealed
Ghana Named Among 3 African Countries Likely To Hike Policy Rate This Month
Take Pig Farming as a Business- Pig Farmers Association
General Secretary for Ghana Association of Private Schools (GNAPS), Justice King Essie, has revealed that the Ghana Education Service (GES), can no longer become the body in charge of school placement in the country.
NATO Commenses its Military Exercises in Baltics
Snow
FIND OUT MORE

The Vaultz News

Copyright © 2021 The Vaultz News. All rights reserved.

Navigate Site

  • About
  • Advertise
  • Privacy Policy
  • Contact

Follow Us

No Result
View All Result
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2D

Copyright © 2021 The Vaultz News. All rights reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In