More than half of Ghana’s 23 banks have successfully met the required capitalization, according to Dr. Ernest Addison, the Governor of the Bank of Ghana (BoG).
He stated that most of the remaining banks have achieved over two-thirds of the required recapitalization within a three-year period.
Dr. Addison announced this during a press briefing, highlighting that despite elevated credit risks, the banking sector has remained stable. He noted improvements in the sector’s liquidity and profitability positions.
Key financial soundness indicators showed mixed trends. The Capital Adequacy Ratio, adjusted for reliefs, was 13.6% in February 2024, exceeding the regulatory minimum of 13.0%, compared to 12.6% in February 2023. Liquidity and profitability ratios also improved from the previous year.
However, the non-performing loan (NPL) ratio increased to 24.6%, attributed to downgrades of several large exposures. Excluding the loss category, NPLs remained in single digits at 9.8%.
The Bank of Ghana anticipates that completing the recapitalization process early will enhance the banking sector’s resilience and enable it to better support the recovery of the real sector.
In a related development, credit to the private sector by banks remained low. Private sector credit growth was 5.1% in February 2024, compared to 29.5% in February 2023.
Conversely, banks’ investments in Government of Ghana and Bank of Ghana instruments increased significantly, reaching GH₵53.6 billion, a 67.6% year-on-year increase, compared to 36.9% for the same period in 2023.