The Governor of the Bank of Ghana, Dr. Ernest Addison has assured that the banking sector will remain broadly stable, supported by the regulatory reliefs and sustained growth in profitability.

Speaking at the 60 Anniversary Celebrations of the Chartered Institute of Bankers, he said the turnaround in banks’ profits in the first-half of 2023 together with the planned equity capital injections, is expected to help rebuild banks’ capital buffers, enhance resilience, and reposition the sector to support the country’s growth agenda.

Banks have already been advised to submit capital restoration plans to recapitalize progressively over a three-year period.

Dr. Addison said the Central Bank will continue to monitor developments and ensure strict regulatory and ethical compliance in the banking sector to ensure stable and resilient financial system, contributing significantly to the overall growth and development of the economy.

The Governor continued that the chosen theme for the celebration, which is, “Redefining professionalism in banking through ethics” provides a unique opportunity to rethink the core measures that would help build a more sustainable and trustworthy financial industry.

“The global financial crisis of 2008 and even our own banking crisis, which reflected poor ethical values based on weak governance structures and internal controls, highlighted the need for renewed emphasis on ethics and responsible behaviour in the banking sector. A key lesson drawn from the crisis is that the lack of ethical standards within the banking sector puts all stakeholders at risk, especially shareholders and depositors, and ultimately destabilises the entire financial sector, with spillovers on the economy”, he explained.

This, he said, called for the entrenchment of ethical behaviour in the conduct of banking sector operations. To achieve this, he urged banks to prioritise ethical leadership at all levels, invest in ethics training and education for all employees, develop clear and comprehensive codes of conduct that outline expected behaviours and ethical guidelines for all employees, incorporate sustainability and responsible banking principles into banking operations, among others.

By redefining professionalism in banking through ethics, Dr. Addison said financial institutions can regain the trust of customers, investors, and the public.

“This will not only enhance credibility but also contribute to a more stable and resilient financial system that serves the best interests of society”, he mentioned.

In all of these, he said the Bank of Ghana remains committed to providing the supportive frameworks to ensure ethical and sustainable banks, adding, “So far, the Bank has commenced development of a Business Model and Viability Analysis Framework to enhance its supervisory practices for assessing the sustainability of banks’ business models. BMA allows supervisors to identify banks’ vulnerabilities at an early stage and ensure safety and soundness”.

In addition, the Central Bank has incorporated a limited Asset Quality Review in its supervisory programme for 2023. This special exercise is being conducted by the Bank to assess the health of banks’ loan and investment portfolios to determine whether their asset classifications are in line with the required classification norms as well as International Financial Reporting Standards.