By Kofi AHOVI
Data released by the Bank of Ghana (BoG) last week indicate that the banking sector continues to be well capitalized, profitable and liquid.
Total assets of the industry as at end of September 2010 stood at GH¢15.6 billion, representing a growth of 29.1%, compared with GH¢14 billion as at December 2009. The increase in assets was due mainly to an increase in deposits.
The banking industry’s Capital Adequacy Ratio (CAR), which is a measure of the industry’s ability to withstand unexpected losses using a bank’s own shareholders capital, increased from 14.9% in December 2009 to 19.1% in September 2010.
The Non Performing Loans (NPL) ratio, having ended 2009 at 16.2%, peaked at 20% in February 2010, but has since been trending downwards and was 18.1% at the end of September 2010. NPL measures the loan portfolio quality of banks and is defined as the ratio of loan losses to gross advances.
The Bank of Ghana credit conditions survey conducted in November 2010 shows some improvement in access to credit by small and medium-scale enterprises for the first time since the beginning of 2010. This development is helping to improve overall credit conditions in the last quarter of this year.
The access of large enterprises and households to consumer credit also continued to improve, according to the survey. Expectations regarding general economic activity, competition among commercial banks and reductions in markups all contributed to the net easing of credit. However, the credit stance on mortgage finance continued to tighten.
The survey further shows that credit to the private sector, in real terms, is recovering, as it increased by 2.5% between June and September 2010.
On annual basis, growth of Deposit Money Banks (DMBs) credit to the private sector declined by 0.4% by October, compared with the decline of 3.8% as at end-July 2010.
Data released by the Bank of Ghana (BoG) last week indicate that the banking sector continues to be well capitalized, profitable and liquid.
Total assets of the industry as at end of September 2010 stood at GH¢15.6 billion, representing a growth of 29.1%, compared with GH¢14 billion as at December 2009. The increase in assets was due mainly to an increase in deposits.
The banking industry’s Capital Adequacy Ratio (CAR), which is a measure of the industry’s ability to withstand unexpected losses using a bank’s own shareholders capital, increased from 14.9% in December 2009 to 19.1% in September 2010.
The Non Performing Loans (NPL) ratio, having ended 2009 at 16.2%, peaked at 20% in February 2010, but has since been trending downwards and was 18.1% at the end of September 2010. NPL measures the loan portfolio quality of banks and is defined as the ratio of loan losses to gross advances.
The Bank of Ghana credit conditions survey conducted in November 2010 shows some improvement in access to credit by small and medium-scale enterprises for the first time since the beginning of 2010. This development is helping to improve overall credit conditions in the last quarter of this year.
The access of large enterprises and households to consumer credit also continued to improve, according to the survey. Expectations regarding general economic activity, competition among commercial banks and reductions in markups all contributed to the net easing of credit. However, the credit stance on mortgage finance continued to tighten.
The survey further shows that credit to the private sector, in real terms, is recovering, as it increased by 2.5% between June and September 2010.
On annual basis, growth of Deposit Money Banks (DMBs) credit to the private sector declined by 0.4% by October, compared with the decline of 3.8% as at end-July 2010.
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