In the first eight months of 2023, banks in Ghana made a profit-after-tax of GH¢5.7 billion, the Bank of Ghana has announced.

In a statement issued by the central bank after its Monetary Policy Committee press conference in Accra last week, it indicated that commercial banks’ profitability remained strong in the first eight months of 2023.

“The industry recorded profit-after-tax of GH¢5.7 billion, representing a 41.4 percent annual growth, compared with 26.5 percent growth recorded last year. Specifically, net interest income increased sharply by 37.9 percent to GH¢13.5 billion, while net fees and commissions went up by 27.3 percent to GH¢2.9 billion,” it said.

It noted further that the banking sector remained stable as the industry’s total assets increased to GH¢244.7 billion in August 2023, from GH¢204.6 billion in August 2022.

“The growth in banks’ assets was funded by deposits, which grew sharply by 38.9 percent to GH¢189.9 billion from GH¢136.7 billion in the same comparative period. Total borrowings by banks, however, contracted by 41.0 percent to GH¢13.9 billion in August 2023 from GH¢23.5 billion a year earlier,” it added.

It said in August 2023, private sector credit, in year-on-year terms, increased moderately by 10.7 percent, relative to the 35.8 percent growth recorded in August 2022. In real terms, credit to the private sector contracted by 21.0 percent relative to a growth of 1.4 percent over the same comparative period, reflecting increased risk aversion of banks during the period.

On Treasury bill rates, the Bank said at the auctions for Government of Ghana securities, the 91-day and 182-day Treasury bill rates decreased marginally to 26.35 percent and 27.84 percent, respectively in August 2023, down from 27.68 percent and 29.12 percent, in the same month of 2022. The rate on the 364-day instrument, however, increased to 30.88 percent, from 28.92 percent over the same comparative period. All the rates were however negative in real terms, given the rate of inflation.

It stated that the rate at which banks borrowed from each other, that is, the interbank weighted average rate, rose to 26.59 percent in August 2023 from 21.93 percent in August 2022, in line with increases in the monetary policy rate. Consequently, average lending rates of banks increased to 31.78 percent in August 2023, from 27.96 percent recorded in August 2022.

Source: Ghana Business News

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