The banking industry continues to demonstrate robustness and the ability to withstand challenges.

Dr. Ernest Addison, the Governor of the Bank of Ghana, recently gave a press briefing after the Monetary Policy Committee’s 116th meeting. During the briefing, he discussed the recapitalization of banks following the Domestic Debt Exchange Programme (DDEP) and the performance of banks in 2023.

According to Dr. Addison, the recapitalization process is expected to continue smoothly, thanks to the performance of banks in 2023 and the establishment of the Ghana Financial Stability Fund (GFSF). He stated that most banks are ahead of schedule in meeting the 2026 deadline to restore their capital levels, and that the GFSF has already disbursed GH¢2.5 billion to support the process.

Dr. Addison also mentioned that banks with investments from the Ghana Amalgamated Trust (GAT) will receive further support from the government in their recapitalization efforts. He reassured the public that the banking sector is strong and resilient, and that there should be no concerns about banks meeting the recapitalization requirements.

The GFSF, which was established as an additional safety net, aims to mitigate any potential impacts on the financial sector from government debt operations. It includes not only commercial banks, but also special deposit-taking institutions, rural and community banks, insurance companies, fund managers, collective investment schemes, and broker-dealers.

Dr. Addison also noted that the banking industry has shown improved performance, with profits rebounding from losses reported in 2022. The industry’s balance sheet remains strong, with increased assets funded mainly by deposits. Key financial indicators such as the Capital Adequacy Ratio, liquidity, and profitability have also shown positive trends compared to the previous year.

Overall, the banking sector in 2023 has exhibited stability, liquidity, and profitability, despite challenges such as domestic debt restructuring and macroeconomic issues. This is a positive sign for the industry and the economy as a whole.  

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