Commercial banks’ profitability improved over the first two months of 2022, with profit before tax at GH¢1.3 billion, compared to GH¢1.1 billion in the same period last year, the central bank said in a press release.
It notes that net interest income grew by 10.3 per cent to GH¢2.2 billion, compared to 10.9 per cent a year ago. Net fees and commissions grew by 11.8 per cent to GH¢486.8 million, lower than the growth of 13.7 per cent registered during the same period last year.
“Other income of the banks stood at GH¢383.2 million, representing 95.5 per cent growth, compared with a contraction of 16.5 per cent in the same period last year. These developments resulted in a 16.9 per cent growth in operating income to GH¢3.1 billion, compared with a growth of 8.7 per cent in the corresponding year. However, operating expenses went up by 21.3 per cent on account of higher administrative costs and emoluments, relative to a contraction of 0.3 percent in the same period last year,” it said.
Their total assets stood at GH¢187.8 billion in February 2022, representing 23.5 per cent annual growth, compared with 18.5 percent growth in the previous year, it said.
The Bank of Ghana notes that the growth in assets was on the back of increased deposits and borrowing.
“Total deposits recorded a year-on-year growth of 18.2 per cent to GH¢123.0 billion. Borrowing increased significantly by 78.8 per cent to GH¢25.5 billion, relative to the contraction of 23.4 per cent in the previous year.
The rebound in credit growth continued in the first two months of 2022, with a 70.7 per cent increase in New Advances to GH¢8.0 billion, compared with 24.6 per cent growth in the same period last year,” it added.
It indicates further that trends in the financial soundness indicators remained positive, underpinned by strong solvency, liquidity, and profitability.
“The Capital Adequacy Ratio of the Industry was 19.6 per cent at end-February 2022, well above the current 11.5 per cent regulatory minimum threshold. Core liquid assets to short-term liabilities was 24.2 percent in February 2022, compared with 26.5 percent in the previous year,” it said.
Improvements in asset quality continued into 2022, with the Non-Performing Loans (NPL) ratio declining to 14.4 per cent on average, at end-February 2022, compared with the NPL ratio of 15.3 per cent in February 2021, the central bank said.
By Emmanuel K. Dogbevi