The share of banks investments comprising bills, securities, and equity in total assets increased to 36.4% in 2023 from 32.0% in 2022, according to the Bank of Ghana’s January 2024 Banking Sector Development Report.

Cash and bank balances was the second largest component of total assets with its share improving from 29.1% percent to 30.7% over the same period.

The proportion of net advances in total assets, however, declined to 23.8% from 28.2% while the share of non-earning assets reduced from 10.6% to 9.1% during the review period.

The Central Bank disclosed that the asset structure of the banking industry’s balance sheet in December 2023 reflected banks’ preference for less risky assets.

Share of deposits up to 78%

On the liability side, the share of deposits in banks’ liabilities and shareholders’ funds increased to 78.0% in December 2023, from 75.5% during the same period in the prior year.

The decline in borrowings translated into a decreased share of 5.5% in December 2023, compared to 8.9% a year earlier.

Following the strong growth in profits after tax, the proportion of shareholders’ funds in banks’ total funding improved to 10.6% from 8.7%.

The share of other liabilities, however, declined from 7.0% in December 2022 to 5.9% in December 2023.

Interest income accounts for 76% of banks’ income

Meanwhile, interest income was the largest component of banks’ income streams in December 2023, accounting for 76.8% of banks’ income compared to 75.7% in December 2022.

The share of banks’ income from fees and commissions however, declined to 10.8% from 11.3% in 2022 while the proportion of other income in total income was lower at 12.4% in December 2023 compared to 13.0% in December 2022.