Adnan Adams Mohammed
Ghana’s banking sector remains resilience in spite of global financial crisis, the Bank of Ghana Governor has said.
Justifying that, banks are posting strong capital and liquidity buffers, improved performance notwithstanding the impact of the Domestic Debt Exchange Programme (DDEP) on the balance sheet of banks.
In spite of these performance, the Governor believes more efforts needed in terms of monetary policy and and economic management reforms to solidify the resilience of the banking sector.
“A lot remains to be done to promote a more resilient banking industry”, Dr Ernest Addison said when addressing the annual general meeting of the Ghana Association of Banks last week in Accra. Emphasising that, “several policy measures have been implemented to achieve the regulator’s objective of ensuring that the sector remains “strong, stable, and viable” to support the country’s growth agenda.”
In the first half of 2024, the banking sector performance “pointed to continued recovery from the impact of the DDEP”, the Governor indicated.
Total banking sector assets grew by 33.3 per cent to GH¢323.1 billion as of the end of June 2024, relative to 21.2 per cent growth as of the end of June 2023.
Profitability, liquidity, and efficiency indicators also improved over the period.
Also, the Capital Adequacy Ratio (CAR), adjusted for reliefs, remained unchanged at 14.3 per cent, between June 2023 and June 2024. Without reliefs, the CAR was reported at 10.6 per cent in June 2024, higher than the 7.4 per cent recorded in June 2023, Dr Addison added when he spoke at the recently held annual general meeting of the Ghana Association of Banks.
It is remarkable to acknowledge that, in February 2021, the Bank of Ghana was admitted as a member of the Basel Consultative Group (BCG) in recognition of the continued efforts to enhance the enabling regulatory environment.
Ghana, therefore, became one of the four countries, including Tunisia, Mauritius, and Nigeria to obtain BCG membership at that time.
“Over time, the Bank has actively participated and contributed significantly to BCG activities aimed at promoting supervisory cooperation and implementing supervisory standards by the Basel Committee on Banking Supervision (BCBS),” Dr Addison noted.
“This achievement has further strengthened the Bank’s commitment to promote the safety and soundness of the banking sector through effective regulation and supervision. In furtherance to this, the Bank continues to ensure the evolution of its regulatory reform roadmap to address the emerging risks in the financial system; inputs from new and revised policy papers by international standard-setting bodies such as the Basel Committee on Banking Supervision (BCBS); concerns and suggestions raised by key stakeholders such as GAB; and other external shocks to the Ghanaian financial system and economy.”
Dr Addison disclosed that, the Bank commenced a thematic review of banks’ corporate governance practices to assess the effectiveness of their governance framework.
“The exercise is ongoing and aims at ensuring full compliance with regulatory requirements such as the Corporate Governance and Fit and Proper Persons directives. Plans are underway to conduct a thematic review of the viability and sustainability of banks’ business models,” he said.
