By Kofi Ahovi
The latest Bank of Ghana credit conditions survey shows a general net tightening of credit conditions. With the exception of consumer credit which saw some easing, the credit stance for all other loan types including SMEs, large enterprises, short and long term loans were tightened in the first four months of this year.
Annual growth in private sector credit slowed to 28.7% in nominal terms at the end of March 2013, from 44.6% in March 2012. Similarly, annual growth of real private sector credit was 17.6% in March 2013, down from 32.9% in March 2012.
Meanwhile the banking sector recorded strong performance in the first four months of the year, with increased competition, asset growth, improved liquidity and profitability. Total assets of the banking industry increased to GH¢29.6 billion at the end of April 2013, compared with GH¢23.2 billion in April 2012. This was driven mainly by advances, which accounted for 42.5% of the total. The asset growth was funded by deposits which recorded year -on-year growth of 22.4% to GH¢20.7 billion at the end of April 2013.
Non-Performing Loans (NPL) ratio within the banking industry decreased to 13.3% in April 2013, from 14.1% in April 2012, while the ratio excluding the loss category, declined to 5.2% from 6.1% in the same period.
Interest rates on the Treasury bill market have broadly declined. Between December 2012 and April 2013, both the 91-day and 182-day Treasury bill rates remained broadly unchanged at 23%. The 1-year note rate fell from 23% to 22.1%, and the rate on the 2-year note declined from 23% to 22.4%. The 3-year bond rate fell from 21% to 16.9%.
The weighted average interbank rate declined to 16.9% in April 2013, from 17.5% in December 2012. However, average lending rates of the banks were revised upwards to 27.1% in April 2013, from 25.7% in December 2012. The average rate on 3-month deposits remained stable around 12.3%, resulting in a wider spread of 14.8% in April 2013, compared with a spread of 13.2% in April 2012.
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