By Elorm Desewu
Universal banks’ profitability growth has shrunk for the first six months of this year. The banking sector’s profit before tax was GH¢4.4 billion, representing 21.6 percent annual growth in June 2022, compared to 32.1 percent in the previous year.
The net interest income grew at 12.4 percent, compared with 19.4 percent a year ago. Net fees and commissions, however, grew by 29.2 percent, compared to 19.6 percent in the previous year, reflecting a rebound in trade financerelated business. These developments culminated in a 23.0 percent growth in operating income, compared with a growth of 15.7 percent in the corresponding year.
Operating expenses also recorded a higher growth of 22.9 percent, compared to 7.3 percent in the previous year, moderating the growth in profit before tax during the first half of 2022.
Total assets grew by 22.8 percent on a year-on-year basis to GH¢200.0 billion at endJune 2022, compared to the growth of 17.2 percent in the previous year. Total deposits grew at a slower pace by 19.1 percent to GH¢131.3 billion, relative to 22.5 percent growth a year earlier.
Key Financial Soundness Indicators of the banking industry remained positive. The Capital Adequacy Ratio was 19.4 percent in June 2022, well above the regulatory minimum of 13.0 percent.
Core liquid assets to short-term liabilities improved to 30.2 percent, compared with 27.5 percent in the previous year. The non-performing loans ratio also improved to 14.1 percent at end-June 2022 compared with 17.0 percent in June 2021, reflecting some moderation in the growth of the stock of non-performing loans, as well as the rebound in credit growth.
