Banks shareholders’ funds grew sharply by 44.9% to GH¢32.3bn -BoG

Banks’ shareholders’ funds position comprising paid-up capital and reserves continued to improve on account of a rebound in profits across the industry.

Total shareholders’ funds grew sharply by 44.9% to GH¢32.3 billion as of the end of June 2024, relative to a contraction of 15.1% recorded a year ago.

Meanwhile, the asset structure of the banking industry’s balance sheet in June 2024 reflected banks’ preference for less risky assets.

Cash and bank balances replaced investments as the largest component of total assets, with an increased share of 35.8% in June 2024, from 27.7% in June 2023, on account of significant increase in banks’ reserves in compliance with the new Cash Reserve Ratio (CRR) requirements.

Investments comprising bills, securities, and equity was the second largest component of banks’ assets at the end of June 2024, although its share in total assets declined to 33.2%, from 37.1% in June 2023.

Investments and cash and bank balances together accounted for 69.0% of total assets in June 2024, compared to a share of 64.8% in June 2023.

On the liability side, the share of deposits in banks’ liabilities and shareholders’ funds declined marginally to 76.1% in June 2024, from 77.4% in the corresponding period last year.

The share of borrowings rose to 7.2% in June 2024, from 6.6% a year ago, reflecting the growth in total borrowings during the period.

The share of shareholders’ funds in banks’ liabilities and shareholders’ funds also rose to 10.0%, from 9.2% consistent with the strong growth of shareholders’ funds.

The proportion of “other liabilities” was unchanged at 6.8% during the review period.