A data released by the Bank of Ghana (BoG) revealed that the banking sector has been robust in the first 4 months of the year 2022 with net interest income registering double digit growth.

According to the Bank of Ghana, net interest income for the first 4 months of 2022 stood at GH¢4.6 billion, representing a growth of 12.2% compared to same period last year 2021.

The report indicated that Net fees and commissions also grew grew by GH¢1.1 billion, representing 17.7%. Meanwhile, Bank of Ghana explained that last year’s decline was due to decline in trade finance-related activities in the economy.

Moreover, the report added that other incomes also increased by GH¢1.0 billion, representing 117.5% growth, relative to the contraction by 7.9% last year.

Banking Sector Assets Remain Strong

Developments in the banking sector also indicated strong performance in April,2022, despite the reversal of the COVID-19 regulatory relief measures in March.

Total assets of banks in the country rose to GH¢194.3 billion at the end of April 2022. This showed about 24.8% annual growth, relative to 16.4% growth in the previous year. BoG noted that the growth was underscored by increased in deposits and borrowings.

Total deposits by banks also grew by 21.3% to settle at GH¢127.2 billion, while borrowings recorded a strong growth of 66.2% to GH¢25.9 billion at the end of April, 2022.

Financial Soundness Indicators Remain Strong

According to the Bank of Ghana, the key Financial Soundness Indicators also remained strong, with the Capital Adequacy Ratio at 21.3%, well above the regulatory minimum of 13.0%.

Importantly, Non-Performing Loan ratio eased to 14.3%, compared with 15.5% recorded in April last year, 2021.

These developments resulted in a 22.1% jump in operating income to GH¢6.7 billion, compared with 16.8% growth in the corresponding period of 2021.

Operating expenses recorded 23.0% growth compared to 1.7 % growth in the previous year.

Credit to private sector shows considerable improvement

The Bank of Ghana noted that credit to the private sector also showed considerable improvement, almost back to pre-pandemic levels and broadly in line with the uptrend in economic activities.

Meanwhile, in nominal terms, private sector credit recorded a significant annual growth of 26.5% in April 2022, compared with 6.9% recorded in April, 2021.

In real terms, however, private sector credit grew by 2.3%, due to sustained price pressures, relative to a contraction of 1.5% recorded for the same comparative period.

In terms of new advances, the data showed that credit growth continued to improve, reaching GH¢16.4 billion, representing a 56.5 percent year-on-year growth.

Meanwhile, the latest credit conditions survey revealed that banks are however beginning to tighten credit stance on loans to enterprises and households. Despite the tightening of credit conditions, demand for credit by households and firms continue to remain strong.

Banks Register GH¢2.9bn Profit By April in 2022

Ultimately, the BoG report further revealed that Banks in the country registered GH¢2.9 billion profit in the first four months of 2022, signaling a healthy industry.

This represented a 39.6 percent growth, compared with 26.3 percent growth for the same period of last year.

BoG noted that banks’ earnings were influenced by growth in net interest income and net fees and commissions.