The banking sector total assets in the first-half of the year soared 33.3 percent to GH¢323.2 billion relative to the growth of 21.2 percent recorded in the same period last year, the Bank of Ghana (BoG) has stated in its latest Monetary Policy Report.

It said the higher growth in assets was driven by a robust growth in deposits, as and other funding sources.

The July 2024 Monetary Policy report said foreign assets grew by 57.6 percent in June 2024, compared to 74.5 percent recorded in the same period last year, while domestic assets grew by 31.0 percent in June 2024, compared to the 17.8 percent growth same period last year.

“Investments grew by 19.2 percent to GH¢107.2 billion in June 2024, up from a growth of 11.0 percent in June 2023, due to a significant growth in both short-term and long-term instruments,” noted by the report issued in July this year.

The report said the growth in invest­ments reflected a 7.3 percent growth in short-term bills, from a growth of 149.6 percent in June 2023, while long-term investments (securities) also grew by 28.6 percent in June 2024, having contracted by 23.2 percent in June 2023.

“The mixed growth in both bills and securities investments culminated in a re­duced share of investments in total assets to 33.2 percent in June 2024, from 37.1 percent in June 2023,” the BoG stated.

The monetary report for July 2024 also indicated that gross loans and ad­vances rose by 15.6 per cent to GH¢84.5 billion in June 2024, relative to a 15.4 percent growth in June 2023 and growth in net loans and advances (gross loans adjusted for provisions and interest in suspense) also moderated to 10.3 percent, from 11.3 percent during the same period last year.

It said deposits remained the main source of funding for the banking sector, accounting for 76.1 percent share of total assets in June 2024, from 77.4 percent in June 2023, stating that deposits improved by 31.1 percent to GH¢245.9 billion in June 2024, as against 42.8 percent growth recorded in June 2023.

“The foreign currency component of deposits grew by 29.8 percent to GH¢81.2 billion in June 2024, relative to a growth of 62.5 percent in June 2023, suggesting some currency depreciation effect on the overall growth in total deposits,” the BoG stated.

It said the banking sector’s perfor­mance in first half pointed to continu­ing recovery from the macroeconomic challenges which started in 2022 due to the coronavirus pandemic.

“The banking sector posted strong performance during the first six months of 2024, on the back of sustained increases in deposits and other funding sources. The financial soundness indi­cators remained healthy, with improved solvency, liquidity, and profitability,” the BoG stated in latest Monetary Report.

The Monetary Policy report further noted that the banking sector remained profitable, liquid, and generally efficient during the review period, with stable solvency reflecting the rebound in profitability in the industry post-DDEP implementation, as well as the ongoing recapitalisation effort by banks.

It said the banking sector outlook remained stable, but recapitalisation and enforcement of stringent credit under­writing standards, and intensified loan recovery efforts were critical to ensuring good performance of the banking sector in the medium term.