Bank of Ghana
Bank of Ghana

According to the Cen¬tral Bank, growth in the sector’s income before tax registered a negative growth over the period from 34.9 per cent in De¬cember 2014 to negative 5.4 per cent in December 2015.

Bank of Ghana
Bank of Ghana
Similarly, the industry’s net profit after tax con¬tracted by 10.5 per cent in December 2015 compared with a growth of 35.5 per¬ cent in December 2014.

Already, financial state¬ments released by some players in the industry in¬dicate loses and reduction in their bottom-lines.

Indeed, the regulator confirmed that there were marginal declines in key financial soundness indi-cators in the fourth quarter of 2015 though the do¬mestic banking sector re¬mained sound and solvent during the period.

The report noted that interest income from loans continued to be the main source of income for the banking industry, consti¬tuting 51.5 per cent of total income in December 2015 compared with 45.5 per cent in December 2014. Investment income share of 29.3 per cent of total in¬come in December 2015 was marginally above the 29.2 per cent recorded in December 2014.

The share of income from fees and commission however declined to 11.6 per cent in December 2015 from 12.8 per cent in De¬cember 2014.

Also, indicators of op¬erational efficiency showed deterioration in 2015, mainly because of the energy challenges which bloated the opera¬tional cost of banks and increased staff cost.

Cost to income ratio in¬creased to 84.6 per cent in December 2015 from 76.4 per cent in December 2014 while cost to total assets ratio increased to 15.2 per¬ cent in December 2015 from 12.6 per cent in De¬cember 2014.
Similarly, operational cost to total assets in¬creased to 9.7 per cent in December 2015 from 8.5 per cent in December.

Operational cost to gross income also in¬creased from 51.4 per cent in December 2014 to 53.9 per cent in December 2015.

On liquidity, the liquid¬ity conditions of the bank¬ing sector however tightened in December 2015. All indicators of liq¬uidity decreased but gen¬erally remained within acceptable thresholds dur¬ing the period under re¬view.

According to the Cen¬tral Bank, growth in the sector’s income before tax registered a negative growth over the period from 34.9 per cent in De¬cember 2014 to negative 5.4 per cent in December 2015.

Similarly, the industry’s net profit after tax con¬tracted by 10.5 per cent in December 2015 compared with a growth of 35.5 per¬ cent in December 2014.

Already, financial state¬ments released by some players in the industry in¬dicate loses and reduction in their bottom-lines.

Indeed, the regulator confirmed that there were marginal declines in key financial soundness indi-cators in the fourth quarter of 2015 though the do¬mestic banking sector re¬mained sound and solvent during the period.

The report noted that interest income from loans continued to be the main source of income for the banking industry, consti¬tuting 51.5 per cent of total income in December 2015 compared with 45.5 per¬ cent in December 2014. Investment income share of 29.3 per cent of total in¬come in December 2015 was marginally above the 29.2 per cent recorded in December 2014.

The share of income from fees and commission however declined to 11.6 per cent in December 2015 from 12.8 per cent in De¬cember 2014.

Also, indicators of op¬erational efficiency showed deterioration in 2015, mainly because of the energy challenges which bloated the opera¬tional cost of banks and increased staff cost.

Cost to income ratio in¬creased to 84.6 per cent in December 2015 from 76.4 per cent in December 2014 while cost to total assets ratio increased to 15.2 per ¬cent in December 2015 from 12.6 per cent in De¬cember 2014.
Similarly, operational cost to total assets in¬creased to 9.7 per cent in December 2015 from 8.5 per cent in December

Operational cost to gross income also in¬creased from 51.4 per cent in December 2014 to 53.9 percent in December 2015.

On liquidity, the liquid¬ity conditions of the bank¬ing sector however tightened in December 2015. All indicators of liq¬uidity decreased but gen¬erally remained within acceptable thresholds dur¬ing the period under re¬view.

Domestic assets com¬ponent of total assets in¬creased by 24.1 per cent to GH057.98 billion at the end of December 2015 compared with 39.9 per cent growth recorded for the same period in 2014. Growth in foreign assets slowed down from the 69.4 per¬ cent recorded in Decem¬ber 2014 to 12.5 per cent growth in December 2015.

The Central Bank concluded that Ghana’s banking sector continued to be sound and solvent as evidenced by key fi¬nancial soundness indi¬cators, though there has been some deterioration in asset quality and effi¬ciency.

It added that the bank¬ing industry’s perform¬ance is expected to pick up with the improvement in the energy supply, on¬-going fiscal consolida¬tion reflected in the lower Treasury bill rates and relative stability in the exchange rate.

Source The Finder

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