The banking industry saw an increase in its Non-Performing Loans (NPL) ratio, which rose to 21.8% in December 2024, compared to 20.6% in December 2023, according to the Bank of Ghana. Elevated credit risk continues to pose a significant challenge to the sector.
Despite this, the Central Bank reported that the industry remains strong, resilient, and liquid, supported by improvements in the domestic macroeconomic environment.
In its Monetary Policy Report, the Bank of Ghana highlighted that the sector continues to be profitable, well-capitalized, and liquid. Total assets in the banking industry expanded by 33.8% in 2024.
The Capital Adequacy Ratio (CAR), including regulatory reliefs, saw a slight improvement, rising to 14.0% in December 2024 from 13.9% in December 2023. Excluding reliefs, the CAR increased significantly to 11.3% in December 2024, compared to 8.3% recorded in December 2023.
Profitability Slows
Although the banking sector’s profit levels increased in 2024 compared to the previous year, the growth rate of profits slowed. This slowdown led to a moderation in profitability indicators over the period.
The report underscores the industry’s ability to weather challenges, even as it continues to navigate risks associated with rising NPLs.
SOURCE: http://dew360/net
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