Governor of the Bank of Ghana, Dr. Ernest Addison has lamented that the emerging signs of the current macroeconomic conditions in the country are spilling over to the banking sector.
According to him, profitability levels have declined alongside other financial soundness indicators within the Ghanaian economy.
“Profitability levels in the banking sector have declined, driven by the mark-to-market losses on investments, higher impairments on loans, and rising operating costs.”
“Profit-after-tax was GH¢3.9 billion at the end of December 2022, representing 18.9 percent contraction year-on-year, compared to 12.3 percent annual growth recorded in 2021.”
Dr. Ernest Addison made this known when addressing journalists at the 110th MPC press briefing on January 30, 2023.
He further pointed out that the latest macro-prudential risk assessments indicated increased pressure on solvency and liquidity of banks ahead of the implementation of the Domestic Debt Exchange Programme.
“To moderate the potential impact on the sector, the Bank of Ghana has announced some regulatory reliefs for banks to help preserve financial stability.”
He was however optimistic that the government of Ghana having reached a Staff Level Agreement (SLA) with the IMF will provide measures to put the fiscal on the path of consolidation.
“The concerns being expressed in the public domain relating to high government expenditures have been addressed in the SLA and reflected in the 2023 Budget,” he added.
Meanwhile, the Central Bank on January 30, 2023 hiked the monetary policy rate by 100 basis points from 27 to 28 percent.
Source: ghanaweb.com
