Dr Ernest Addison
Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has indicated that six banks have so far met the minimum capital requirement while two others are working hard to meet it.
He disclosed that the rest are at various stages of compliance.
Addressing a press conference yesterday in Accra after the 83rd Monetary Policy Committee meeting of the BoG, he said about 15 banks would meet the requirement by the end of this year.
He said reconstruction and balance sheet repairs in the financial sector were ongoing and that there were emerging signs of some turnaround, as banks prepare to meet the new minimum capital requirement.
“Latest developments in banks’ balance sheet showed an increase in total assets to GH¢100.3 billion in June 2018, indicating an annual growth of 15.7 percent. The asset growth was mainly funded by deposits which went up by 13.4 percent on a year-on-year basis.
“The industry’s average Capital Average Ratio (CAR) improved to 19.3 percent in June 2018 from 18.2 percent in April 2018, reflecting efforts by banks to recapitalize.”
Credit to private sector
Dr Addison revealed that credit to the private sector, as at the end of June 2018, grew by 5.7 percent compared to 2.4 percent as at end of March.
“This trend, however, fell short of the 15.1 percent recorded a year earlier. Banks and Specialised Deposit taking Institutions (SDIs) are, however, increasing disbursement of new loans,” he noted, adding that new advances in the banking and SDIs sectors continued to increase in the year, recording a 24.7 percent year-to-date growth in June 2018 compared to 4.2 percent growth in the same period last year.”
He said the financial soundness indicators of the banking industry had improved moderately since the last MPC meeting, although pockets of weaknesses remain.
“The non-performing loans (NPLs) ratio eased slightly to 22.6 percent in June 2018 from 23.4 percent in April.”
He said the NPLs ratio is stable at 12.3 percent.
By Samuel Boadi