The structure of banks investment portfolio remain same in 2020 despite its investment holdings increasing.
According to Tesah Capital, the movement towards longer dated instruments which led to an increase in the share of securities in total investments from 1.1% in 2018 to 1.8% 2019 was reversed in 2020 to 0.4%.
In 2020, banks holdings in bonds was 77.6% compared with 68.2% in 2019, whereas investment in Treasury bills was 20% last year as against 30% in 2019.
However, banks’ appetite for Government of Ghana securities remain strong as they reduce the size of their loan books in response to the risks presented by the Covid-19 pandemic on banking activities.
For credit growth, it slowed down in 2020 from 25.7% in 2019 to 4.6%.
This was occasioned by the outbreak of the Covid-19 pandemic and its resultant effect on businesses and loan repayments.
However, private sector credit still constitutes the larger proportion of credit in the banking sector. Its share increased to 91.1% in 2020 from 87.1% in 2019, while the share of public sector decreased to 8.9% from 12.6% over the same period.
Assets and liability structure
Total assets of the banking sector stood at ¢149.3billion as at December 2020, indicating a year-on-year growth of 15.7% (2019: 20.2%).
The lower growth in 2020 was due to adverse impact of Covid-19 pandemic on banking activities in 2020.
Net advances formed the larger proportion of the asset mix until 2018 where investment began to dominate.
The sharp growth in total investments in 2018 was largely due to the special resolution bonds issued to Consolidated Bank Ghana (CBG).
Investment holdings increased in 2020 as banks move to less risky assets that is Government of Ghana securities as a result of the pandemic-induced elevated credit risks.
Meanwhile, deposits remained the main source of funding for the industry, with its share increasing from 64.7% to 69.6% between 2019 and 2020
Latest Stories
-
World Bank u-turn on Uganda loan ban ignites Africa’s LGBTQ+ rights crossroads
11 minutes -
At least 242 on board Air India flight to London that crashed after takeoff in Ahmedabad
17 minutes -
Fitch changes global oil sector outlook to deteriorating; predicts average oil price of $65 for 2025
25 minutes -
The Plant Plug GH to host third Sip and Soil Experience on June 28
29 minutes -
UK-Ghana Chamber of Commerce celebrates Fidelity Bank MD, Julian Opuni
33 minutes -
Ghana braces for Economic Storm as Global Trade Wars Intensify
36 minutes -
African Science Academy graduates 50 STEM girls
36 minutes -
No live ammunition during Ga State festivities – Police caution
42 minutes -
GIADEC to unlock the full potential of Ghana’s bauxite: A New Era for the Integrated Aluminium Industry
56 minutes -
Ghana secures 0% tariffs for exported goods to China
1 hour -
Collateral registration hits over 1.4m since its inception in 2010 – BoG
1 hour -
US to partially evacuate embassy in Iraq as Iran tensions rise
2 hours -
Dietary Strategies in Management of Chronic Kidney Disease
2 hours -
Societe Generale records 30% year-on-year growth in profit
2 hours -
Ghana ranked 8th among Africa’s top 10 manufacturing countries; 1D1F praised
2 hours