The growth rate in commercial banks’ deposits has slowed down amidst the reforms undertaken by the central bank to strengthen the sector.
The Bank of Ghana in its latest banking sector report stated that deposits, as the main source of funding for the banking industry, grew by 17.1 percent in October 2019, marginally lower than the 20.7 percent increase in the previous year.
The central bank report means that although bank total deposits still grew in the period under review, the rate of growth fell short of what was achieved a year earlier.
The total banking sector deposits increased to GH¢78.90 billion by GH¢11.51 billion in October 2019 from GH¢67.38 billion in October 2018.
Despite the slowdown in growth rate, the Bank of Ghana maintains that the sheer growth points to a renewed confidence in the banking sector following the reforms.
According to the report, domestic deposits grew at the same pace as total deposits to GH¢78.50 billion in October 2019 from GH¢67.04 billion in the previous year, while deposits of non-residents remained small at GH¢397.70 million from GH¢342.10 million.
The foreign currency component (denominated in Ghana Cedis) of total deposits, on the other hand recorded a higher growth of 22.4 percent in October 2019 to GH¢20.79 billion compared with a growth of 13.7 percent a year ago.
The report revealed that as of October 2019, banks in the country made a total profit of GHS2.83 billion which was a 45.3 percent increase in the figure recorded same period in 2018.
The regulator attributes this increase in profitability in the banking sector to the reforms it implemented over the last two years.