[ad_1]
Figures from the Bank of Ghana (BoG) showed that the profitability of the country's commercial banks declined by nearly 10 percent in 2018, but the central bank said that overall, the banking sector remained solid.
Bank profit growth, which stood at 21.7% in December 2017, fell to 12.5% in December 2018, reflecting the BoG reforms and the consolidation of the banking sector.
The reforms, which saw the minimum capital requirements of banks go from 120 million cedis to 400 million cedis, reduced the total of 34 banks in the country to 23, between 2017 and 2018, some of them s being collapsed because of liquidity problems, poor corporate governance others.
Speaking at the first 2019 CEO Breakfast hosted by the lead partner of the Ghana Investment and Investment Promotion Center (GIPC) at PwC, Vish Ashiagbor said that " earnings growth has declined, but the sector is still very profitable "
In the aftermath of the reforms, he said the press had hinted that the banking sector had collapsed, but said the situation on the ground, according to BoG figures, shows the opposite.
"There was a lot of press and sometimes it was very negative and you could think that the whole sector is about to collapse but that is not quite the case", a- he declared.
Citing BoG figures, he said total bank badets rose from C $ 93.6 billion in 2017 to C $ 107.3 billion in 2018; a growth rate of 14.7% in one year.
The issue of nonperforming loans, which has affected many bankrupt banks, has improved, he said, in one year.
"You can see that the ratio has been reduced, which has resulted in a decline in the number of non-performing loans," he said.
The ratio of non-performing loans by BdG decreased by 3.4% between 2017 and 2018, from 21.6% in 2017 to 18.2% in 2018.
Return on equity also increased from 18.7% in 2017 to 18.5% in 2018.
Mr Ashiagbor said that the capital ratio under capitalization and other initiatives introduced by the central bank had increased.
"We have not really seen a significant downward trend across the sector. The sector is dynamic … whatever the figures of today, what are the numbers of tomorrow, it is dynamic, it will continue to change.
"This is precisely why reforms are important because what you see today, depending on how we manage the situation, will change. Despite all the bad news, the banking sector remains strong, "he said.
For his part, BoG's head of banking supervision, Osei Gyasi, justified the decision to reform the banking sector by saying that the general objectives were to ensure the resilience and efficiency of the sector, to protect customer deposits made available to banks.
He agreed with the statement that the Banking Act and Specialized Deposits [Act 930] is one of the "very dangerous laws" to have been promulgated, given the impact of its application over the past two years.
Bank deposits up
Nevertheless, he said the reforms had "significantly improved" banks' liquidity positions.
He added that the banks had now started to record high receipts after some customers withdrew their savings as a result of the reforms.
"We have seen people withdraw their money from banks because of what happened, but the available data we have recently received indicates that bank deposits are increasing … the level of deposits is increasing," he said. he indicates.
This development, he said, confirms that people now trust the surviving banks.
They "think that the banks that have survived, have come out of the reforms, are able to keep the deposits that they make available to these banks," said Mr. Gyasi.
At the same time, he added, banks need medium- and long-term deposits to advance the country's economy, noting that this will allow them to finance long-term projects and offer them more promising prospects. .
By Stephen Kwabena Effah | 3news.com | Ghana
[ad_2]
Source link
