Shareholders’ funds of banks increased by 11.9% to ¢26.5 billion in October 2022, the November 2022 Monetary Policy Report of the Bank of Ghana has revealed.

This was from ¢23.7 billion (15.6% year-on-year growth) in October 2021.

The slowdown in the growth of shareholders’ funds was on the back of a slowdown in the accumulation of reserves, while growth in paid-up capital was higher at 4.4% from 1.6% in the previous year.

Overall, the Bank of Ghana, said, banking sector maintained a robust balance sheet performance during the first 10 months of 2022, with improvements in most of the key indicators.

Banking industry's investments fall

The stock of the industry’s investments stood at ¢85.0 billion in October 2022, from ¢83.4 billion in October 2021.

On year-on-year terms, investments recorded a sharp decline in growth from 25.5% to 1.9%, reflecting the portfolio reallocation by banks in favour of loans and other assets.

Consequently, the share of investments in total assets declined to 34.0% in October 2022, from 48.0% in October 2021.

The slowdown, according to Bank of Ghana, in investments was pronounced in short-term bills which contracted by 45.5% compared with the 21.1% growth in the previous year, while growth in long-term securities moderated to 20.9%, from 27.4% growth a year earlier.

Credit recorded strong growth

The Bank of Ghana said strong growth in credit persisted, with gross loans and advances recording an annual growth of 57.5% percent to ¢81.2 billion at end-October 2022, compared to 8.9% growth in October 2021, reflecting increases in domestic currency loans and the revaluation of foreign currency denominated loans.

Similarly, net loans and advances recorded a sharp growth of 60.8% in October 2022 to ¢72.1 billion, compared to a growth of 8.8% in the previous year.

Deposits continued to dominate the funding mix of banks, increasing by 46.5% to ¢172.1 billion in October 2022, compared with the 17.2% growth in October 2021.

Borrowings also increased by 47.6% to ¢30.4 billion in October 2022 compared with 14.6% growth in October 2021.