First Bank of Nigeria (FBN) Ghana, with a remarkable liquidity to total deposits ratio of 131% was the most liquid bank in 2022.

It ratio was well above the industry's average by 54%.

This exceptional growth, according to the 2023 Ghana Banking Survey by PwC is attributed to the bank's change in investment strategy from bonds to treasury bills.

Over the past 5 years, FBN has consistently maintained a higher ratio of liquid funds to total deposits than the industry average suggesting that the bank follows a conservative strategy focused more on liquidity rather than the advancement of loans generally.

With a 131% ratio of liquid funds to total deposits, the bank holds an excess of ¢500 million in liquid assets over its total deposits.

Bank of Africa, Access Bank Ghana, Fidelity Bank, First National Bank, Standard Chartered Bank, UBA, Absa and Zenith Bank Ghana also demonstrated resilient positions by maintaining liquidity to deposit levels above the industry's ratio of 77%.

This consistent performance, the report said, has been observed over the past four years, with Bank of Africa (BOA) holding the highest ratio among the mentioned banks.

In 2022, BOA had total liquid assets of ¢2.2 billion compared to ¢2 billion in 2021, indicating a sustained level of liquidity.

The other banks in this category, which also maintain liquidity to deposit levels above the industry ratio, have an average of ¢3.7 billion in liquid assets, down from ¢4.6 billion in 2021.

According to the report, the stability and ability to meet financial obligations of banks heavily rely on their liquidity, but there has been a significant decrease in liquidity across the industry, raising concerns among stakeholders.

The ratio of liquid funds to total deposits decreased by 16%, dropping from 93% in 2021 to 77% in 2022. This decrease is attributed to a 40% reduction in the industry's liquid funds, falling from ¢113.5 billion in 2021 to ¢68.4 billion in 2022.

Additionally, deposits increased by 34%, rising from ¢121.8 billion to ¢163.7 billion during the same period, compared to a 12% increase in the previous year. The significant decline in liquid assets can be attributed to substantial impairment losses suffered by almost all banks as a result of the Domestic Debt Exchange Programme introduced by the Government of Ghana.