Ghanaian banks’ assets reach GH¢15.6m, credit to SMEs improve

Ghana’s banking sector is well capitalized, profitable and liquid, the governor of the Bank of Ghana, Kwesi Amissah-Arthur has said.

He also said credit to SMEs has improved.

Addressing a press conference Friday December 10, 2010 in Accra he said that the total assets of the country’s banking sector as at end of September was GH¢15.6 million a growth of 29.1% over the September 2009 position.
“The increase,” he said “was mainly due to increase in deposits.”

The banking sector’s ability to withstand unexpected losses – a phenomenon known as capital adequacy ratio (CAR), has also increased from 14.9% in December 2009 to 19.1% in September 2010, he said.

On the Non Performing Loans (NPL), the ratio which measures the loan portfolio quality of banks and is defined as the ratio of loan losses to gross advances, ended 2009 at 16.2%, peaked at 20% in February 2010 but has since been trending downwards and was 18.1% in September 2010.

Access to credit has also improved according to the governor. He said the Bank of Ghana Credit Conditions survey which was conducted in November 2010 shows some improvement in access to credit by Small and Medium-scale Enterprises for the first time since the beginning of 2010.

“This development,” he said, “helped to improve overall credit conditions in the last quarter of this year.”

The access of large enterprises and households to consumer credit also continued to improve, he said.

He also indicated that expectations regarding general economic activity, competition among commercial banks and reductions in markups contributed to the net easing of credit.  “However the credit stance on mortgage finance continued to tighten,” he said.

Amissah-Arthur said, in real terms credit to the private sector is recovering, increasing by 2.5% between June and September 2010.

There are currently 26 registered commercial banks in Ghana, according to the Bank of Ghana.

By Emmanuel K. Dogbevi