Profit before tax of banks stood at ¢6.1 billion in August 2022, representing an annual growth of 25.2%, the Bank of Ghana has pointed out.

This is compared to 27.4% in the previous year.

According to the Monetary Policy Report, net interest income grew by 17.3%, compared to 17.9%.

Net fees and commissions also increased by 26.9% to ¢2.3 billion, compared with 21.8% growth in the previous year, reflecting the rebound in credit growth as well as an increase in trade finance-related business.

Other income of banks also grew by 85.6% to ¢2.0 billion, compared with a contraction of 5.4% a year ago. These developments resulted in a 25.5% growth in operating income to ¢14.2 billion, relative to a growth of 15.7% in the previous year.

Operating expenses, however, increased sharply by 24.3% in August 2022, compared to 9.0% growth in August 2021, partly reflecting the impact of inflation on banks’ operations.

Banking sector performance remains resilient

The report said the banking sector performance remained resilient as of the end of August 2022.

Total assets increased by 22.9% on year-on-year basis to ¢204.6 billion in August 2022 due to sustained growth in deposits, compared to a 16.7% annual growth in the previous year.

Total deposits increased by 22.5% to ¢136.7 billion, relative to 21.8% growth in August 2021.

The key Financial Soundness Indicators (FSIs) of the banking industry have remained positive in the year, with Capital Adequacy Ratio at 18.1%, well above the regulatory minimum of 13.0%.

The sector was also liquid, reflected by an increase in the core liquid assets to short-term liabilities to 31.1% in August 2022 from 24.7% in the previous year.

Asset quality also improved as the Non-Performing Loans ratio.