According to the Bank of Ghana’s January 2024 Banking Sector Development Report, the composition of banks’ investments, including bills, securities, and equity, as a share of total assets increased to 36.4% in 2023 from 32.0% in 2022.
Cash and bank balances were the second-largest component of total assets, with their share improving from 29.1% to 30.7% over the same period.
However, the proportion of net advances in total assets declined to 23.8% from 28.2%, while the share of non-earning assets reduced from 10.6% to 9.1%. The Central Bank noted that the banking industry’s balance sheet in December 2023 reflected a preference for less risky assets.
On the liability side, the share of deposits in banks’ liabilities and shareholders’ funds increased to 78.0% in December 2023, from 75.5% in the prior year. The decline in borrowings translated into a decreased share of 5.5% in December 2023, compared to 8.9% a year earlier.
Following the strong growth in profits after tax, the proportion of shareholders’ funds in banks’ total funding improved to 10.6% from 8.7%. The share of other liabilities, however, declined from 7.0% in December 2022 to 5.9% in December 2023.
Interest income remained the largest component of banks’ income streams in December 2023, accounting for 76.8% of banks’ income compared to 75.7% in December 2022. The share of banks’ income from fees and commissions declined to 10.8% from 11.3% in 2022, while the proportion of other income in total income was lower at 12.4% in December 2023 compared to 13.0% in December 2022.