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The central bank says commercial banks’ total assets in the year to September 2012 have increased to GH¢25.1 billion from GH¢20.3 billion in September 2011.
” The growth in assets was largely funded by domestic deposits.,” the acting governor of the Bank of Ghana said.
Dr. Kofi Wampah who was addressing the media at the Bank’s Monetary Policy Committee press conference in Accra Wednesday November 14, 2012 indicated that the banking system continued to show steady asset growth and profitability in the year to September 2012.
He said the quality of the loan portfolio in the banking industry continued to improve over the period under review.
“The non-performing loans ratio declined further to 13.1 percent in September 2012 from 13.4 percent in July 2012 and 15.7 percent a year ago. Bank solvency, measured by the Capital Adequacy Ratio (CAR), remained strong, although it declined to 16.3 percent in September 2012 from 17 per cent in September 2011,” he said.
In a press release issued after the press conference, Dr. Wampah said other profitability indicators such as Return on Equity, Return on Assets and Return on Earning Assets all improved in the period.
He noted that the credit conditions survey conducted in October 2012 indicated that credit stance for SMEs and credit to households for mortgages were tightened due to low cashflow, unsatisfactory account operation and poor credit history.
“However, credit stance for large enterprises and consumers eased reflecting improved economic expectation,” he said.
The acting governor said private sector credit continued to expand in the year. In nominal terms, he said, credit grew by 43.8 percent on an annual basis in September 2012, compared to 25.5 percent a year ago.
“In real terms, credit to the private sector recorded an annual growth of 31.4 percent against 15.8 percent in September 2011,” he added.
He however said, the pace of growth in broad money supply slowed to 28.8 percent in September 2012 from 41.9 percent in September 2011. The slowdown, he explained, was driven largely by a decline in Net Foreign Assets (NFA) of the banking system.
On interest rates, he said, interest rate trends stabilized between July and September 2012.
During this period, he said rates on the 91-day treasury bills rose to 23.1 percent from 22.8 percent, while 182-day bills rates remained at 22.9 percent.
The 1-year fixed note increased from 22 percent to 22.5 percent. The 2-year fixed note stayed put at 23 percent and the 3-year fixed note was also stable at 24 percent, while 5-year bonds declined to 23 percent from 26 percent, he said.
Dr. Wampah told the media that the interbank weighted average rate increased to 17.8 percent in September from 17.2 percent in July 2012.
The average 3-month deposit rate, he said, moved up to 11.95 percent in September from 10 percent in July 2012, while average lending rates edged up slightly to 25.7 percent from 24.7 percent recorded in July 2012.
“On a year to date basis, therefore, the lending deposit spread narrowed to 13.8 percent in September, from 14.7 percent in July 2012,” he said.
He also noted that banks’ base rate quotations ranged between 12.7 percent and 26.5 percent in October 2012.
“On the average, base rates inched up to 21.8 percent in October, from 21.1 percent in July 2012,” he said.
By Emmanuel K. Dogbevi