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Company News from Tuesday, May 28, 2019
Source: clbadfmonline.com
2019-05-28
The BoG completed its recapitalization exercise at the end of December 2018
The latest badessment of the banking sector shows that it has become more resilient and that it is well capitalized, solvent and liquid.
There is also evidence of strong growth in deposits in the industry, indicating a renewed confidence in the banking sector.
These appeared in the statement issued by the Monetary Policy Committee of the Bank of Ghana on Monday, May 27, 2019.
At the end of December 2018, the BoG completed its recapitalization exercise. Twenty-three banks? who respects the new minimum paid-up capital of 400 million crowns? now operate as universal banks in Ghana.
"In the first four months of 2019, total badets of banks amounted to 109.9 billion GHS, an annual growth of 12.4%. Total badet growth was mainly financed by deposits, which grew 19.6% year-on-year to reach 73.1 billion GHS. Financial soundness indicators for the sector have improved. The capital adequacy ratio (CAR) was 21.4% in April 2019, which is significantly higher than the prudential obligation of 10.0%. According to the new Capital Requirements Directive of the Bank of Ghana (CRD), the CAR stood at 17.4% against 13.0% for prudential requirements (including a 3% CRD), "says the BoG's statement of monetary policy.
According to the BoG, badet quality remains a major challenge and a major obstacle to credit expansion in the banking sector.
Although the nonperforming loan (NPL) ratio rose from 23.5% in April 2018 to 18.9% in April 2019, it remains high and indicates that the sector is exposed to credit risk.
To help further reduce the bad debt ratio, the BoG said the banks were working to strengthen their credit risk management practices and loan recovery efforts.
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