Ghana‘s banking sector, despite the country’s all too many economic challenges, has been touted as very resilient and robust – inspiring confidence among customers. Governor of the Bank of Ghana, Dr. Ernest Yedu Addison says the country’s banking sector ended 2024 very profitable, adequately capitalized, and highly liquid to support the development agenda of the country.
Dr. Ernest Addison disclosed this assessment at the 122nd Monetary Policy Committee press conference on Monday, January 27, 2025. The banking sector’s total assets, the governor says, grew by a remarkable 33.8% in 2024 signifying the sector’s continued strength in driving financial stability and economic growth.
Another important indicator, Capital Adequacy Ratio (CAR) which measures the financial soundness of the banking sector also improved marginally in 2024. From 13.9% in December 2023, the indicator marginally increased to 14% in December 2024. The profitability in the sector, the governor also said recorded growth although at a slower pace relative to the previous year.
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“The banking sector continues to be profitable, well-capitalized and liquid. Assets of the banking sector grew by 33.8 percent in 2024. Capital Adequacy Ratio (CAR) with reliefs grew marginally to 14.0 percent in December 2024 from 13.9 percent in December 2023. Profits went up in 2024 relative to 2023,” the Governor told journalists.
However, Dr. Addison admitted that credit risks remain a pressing concern for the sector. Non-performing loans (NPLs) rose from 20.6 percent in December 2023 to 21.8 percent in December 2024. The increase signifies persistent challenges in loan recovery, underscoring the need for strengthened risk management practices and innovative approaches to credit assessment.
“Elevated credit risk remained the main upside risk to the banking sector. The industry’s Non-Performing Loans (NPL) ratio increased to 21.8 percent in December 2024, up from 20.6 percent in December 2023,” he observed.
With this performance, it is expected that the banking sector will remain robust in the face of challenges and address the banking needs of individuals and the economy.
Looking ahead, the BoG says it remains vigilant about emerging risks, particularly elevated credit risks, which could pose challenges to the sector’s stability. The Governor reaffirmed the Bank of Ghana’s commitment to providing a regulatory environment that fosters growth while ensuring the safety and soundness of the banking system.
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