Bank of Ghana (BoG) has indicated in its banking sector report of November 2018, banks in Ghana are restructuring their balance sheets by transferring themselves from lending to investments.
Banking sector report is published after the Monetary Policy Committee (MPC) meetings.
The report identified the developments were made in banking sector during the policy-making process.
Banking sector report has shown the financial position of the 30 banks in Ghana (BoG) as at October 2018. The report indicates that 13 of these banks are locally-controlled while 17 are foreign-controlled.
Bank asset allocation for the period under review, October 2018 were as follows:
–3.6% to fixed assets
–28.7% to loans and advances
–23.7% to cash and due from banks
–40.3% to investments.
Banks allocated their assets as follows in comparison to October 2017:
–29.6% to investments
–35.8% to loans and advances
–25.1% to cash and due from other banks
–3.9% to fixed assets.
Banks have notably increased their allocations to investments and reduced their allocation to lending in comparison to October 2017. The increase indicates banks’ preference for long-term and less risky assets as against credit extension which is associated with increased risk due to the industry’s high stock of nonperforming loans in BoG.
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