Table of Contents

The Banking and Non-bank Financial System.........................................................2
1. Asset and Liability of the Universal Banks...........................................................2
1.1 Total Assets...................................................................................................2
1.2 Deposits........................................................................................................ 3
1.3 Loans and Advances......................................................................................3
1.4 Non-performing Loans (NPLs)........................................................................4
1.5 Solvency........................................................................................................5
1.6 Profitability ...................................................................................................5
1.7 Compliance with Prescribed Benchmarked ...................................................6
2.0 Structure.......................................................................................................... 6
2.1 Number of Institutions in Operation ..............................................................6
2.2 Approval in Principal (AIP)..............................................................................6
2.3 Application for licence in Progress (WIP)........................................................7
3.0 Microfinance.....................................................................................................7
3.1 Introduction...................................................................................................7
3.2 Provisional Licence........................................................................................8
3.3 Capital Requirement......................................................................................8
3.4 Charges.........................................................................................................8
3.5 Prudential Returns.........................................................................................8
3.6 Measures to Reduce Illegal Operations of Microfinance Institutions...............9
4.0 Conclusion........................................................................................................ 9

1

The Banking and Non-bank Financial System

1. Asset and Liability of the Universal Banks
1.1 Total Assets
Total assets of the industry stood at GH¢24.34 billion as at July 2012, compared with
GH¢19.53 billion recorded the same period last year, representing a year-on-year
growth rate of 24.65 per cent. Reckoning from the beginning of the year till date (July
2012), total assets grew by 10.33 per cent from GH¢22.06 in December 2011.
Table 1: Balance sheet set up of the banking industry
Banks
Cash & ST Funds
Investments
Loans (Net)
Others Assets
PPE
Total Assets
Deposits
Borrowings
Other Liabilities
Sub-Total
Paid-Capital
Reserves
Net Worth
Total Liabs & Equity

GH¢ ‘million’
Jul-12
Jun-12
5,941.43
6,524.67
6,276.69
6,400.13
10,520.64
10,107.30
977.38
952.42
622.58
617.98
24,338.7
24,602.5
2
1
17,580.71
18,028.34
2,033.55
1,824.71
1,411.11
1,511.87
21,025.37
21,364.92
1,881.88
1,879.04
1,431.47
1,358.55
3,313.35
3,237.59
24,338.7
24,602.5
2
1

Dec-11
6,139.08
6,129.09
8,344.01
846.24
600.63
22,059.0
6
15,990.65
1,781.71
1,254.16
19,026.53
1,649.87
1,382.66
3,032.53
22,059.0
6

Jul-11
5,008.14
5,995.41
7,015.13
926.95
579.48
19,525.1
1
13,817.30
1,717.08
1,353.90
16,888.28
1,534.28
1,102.52
2,636.80
19,525.0
8

Growth
Y-on-Y
Y-to-D
18.64
(3.22)
4.69
2.41
49.97
26.09
5.44
15.50
7.44
3.65

Share %
Jul-12
24.41
25.79
43.23
4.02
2.56

24.65
27.24
18.43
4.23
24.50
22.66
29.84
25.66

10.33
9.94
14.13
12.51
10.51
14.06
3.53
9.26

100.00
72.23
8.36
5.80
86.39
7.73
5.88
13.61

24.65

10.33

100.00

Over the year, foreign currency denominated assets increased by 44.14 per cent to
GH¢6.87 billion in July 2012. The acquisition of The Trust Bank (TTB) by Ecobank
Ghana Limited (EBG) brought the number of acquisition this year to two (2); reducing
the number of universal banks in the industry as at July 2012 to twenty five (25);
fourteen (14) foreign banks and eleven (11) domestic banks. Foreign bank penetration
in terms of asset size increased accordingly from 53.45 per cent in December 2011 to
55.85 per cent in July 2012. The concentration ratio, which measures the total assets
percentage share of the five (5) largest banks in stood at 47.25 with EBG being the
largest bank commanding 12.57 per cent of the total assets of the industry as at July
2012.
2

Table 2: Total Assets Concentration Ratio
Jul-12

Jun- 12

Dec-11

Jul-11

EBC

12.57

EBG

12.49

GCB

11.43

GCB

11.36

GCB

10.89

GCB

10.72

EBG

9.78

EBG

10.14

SCB

9.34

SCB

9.46

SCB

8.85

SCB

9.18

BBG

8.12

BBG

8.10

BBG

8.65

BBG

8.91

SBG

6.34

SBG

6.87

ADB

5.65

SBG

6.26

TOTAL

47.2
5

47.6
4

44.37

45.85

1.2 Deposits
Deposits remained the largest funding source of total assets of the banking industry
accounting for 72.23 per cent. Between July 2011 and July 2012, deposits grew by
27.24 per cent from GH¢13.82 billion to GH¢17.58 billion; bringing year-to-date
growth to 9.94 per cent.
The share of the five largest banks in terms of deposit size increased by 1.98 per cent
on year-on-year basis to 48.61 per cent in July 2012, with GCB having the largest
share of deposits (12.43 per cent).
Table 3: Total Deposits Concentration Ratio
Jul-12
GCB
12.43
EBG
12.03
SCB
9.20
BBG
8.20
SBG
6.74
TOTAL

48.61

Jun- 12
EBG
12.44
GCB
11.56
SCB
9.50
BBG
8.08
SBG
7.55
49.1
3

Dec- 11
GCB
12.80
SCB
9.37
EBG
9.29
BBG
8.36
SBG
5.40

Jul-11
GCB
12.71
EBG
9.52
SCB
8.58
BBG
8.53
SBG
7.29

45.22

46.63

1.3 Loans and Advances
Gross credit increased by 46.45 per cent from GH¢7.96 billion at end-July 2011 to GH
¢11.66 billion at end-July 2012. Year-to-date figures also indicate an increase of 24.70
per cent from GH¢9.35 billion at end-December 2012. The Commerce and Finance
Sector remained dominant in terms of credit outstanding for the month of July 2012,
3

with a share of 27.04 per cent of the industry total while the Mining Sector recorded
the least share of 2.75 per cent.
Table 4: Sectoral Credit distribution
Total Credit
Agriculture Forestry & Fishing
Mining & Quarrying
Manufacturing
Construction
Electricity, Gas & Water
Commerce & Finance
Transport, Storage & Comm.
Services
Miscellaneous
Total

Jul-12
613.32
320.43
1,273.98
958.96
943.32
3,153.11
547.15
2,871.22
980.58
11,662.0
7

Jun-12
602.45
300.63
1,042.66
959.76
729.11
3,188.82
568.56
2,755.68
1,024.08
11,171.7
5

Dec-11
537.16
398.50
836.94
751.64
625.02
2,537.65
391.68
2,515.93
757.90
9,352.4
2

Jul-11
454.91
305.89
926.32
645.74
568.19
2,074.58
303.81
2,001.51
682.39
7,963.3
5

Y-on-Y
34.82
4.75
37.53
48.51
66.02
51.99
80.10
43.45
43.70

Y-T-D
14.18
(19.59)
52.22
27.58
50.93
24.25
39.69
14.12
29.38

Share
%
5.26
2.75
10.92
8.22
8.09
27.04
4.69
24.62
8.41

46.45

24.70

100.00

The five-bank credit concentration ratio for the month of July 2012 stood at 41.54 per
cent.
Table 5: Credit Concentration Ratio
ECO
GCB
SCB
ADB
BBG

Jul-12
12.67
8.01
7.54
6.83
6.49
41.54

ECO
GCB
SCB
BBG
ADB

Jun- 12
11.59
8.24
8.01
7.06
6.85
41.75

ECO
GCB
BBG
ADB
SCB

Dec-11
9.18
7.52
7.45
7.43
7.19
38.77

ECO
GCB
BBG
ADB
SCB

Jul-11
8.56
7.97
7.62
7.49
7.39
39.03

1.4 Non-performing Loans (NPLs)
The asset quality indicator continued to improve over the survey period. The nonperforming loans (NPL) ratio of the banking industry declined from the past year’s
(July 2011) level of 16.39 per cent to 13.44 per cent in July 2012. Year-to-date
positions indicated an improvement of 70 basis points in the NPL ratio from 14.15 per
cent in December 2011.
The loss category of non-performing loans of the banking sector stood at 55.95 per
cent in July 2012 relative to 61.46 per cent in July 2011. The NPL in terms of absolute
figure stood at GH¢1.57 billion in July 2012 compared with GH¢1.31 billion in July
2011.
4

1.5 Solvency
The industry was generally solvent as evidenced by the average CAR of 15.52 per cent
in July 2012. Though compared with the same period last year and beginning of the
year the industry CAR reduced by 1.49 per cent and 1.89 per cent respectively it
remained high and above the regulatory 10 per cent benchmark. Only one bank
breached the 10 per cent regulatory benchmark posting a CAR of 9.56 per cent in July
2012.
The banking industry’s paid-up capital improved by 22.66 per cent from GH¢1.53
billion in July 2011 to GH¢1.88 billion as at the end of July 2012. The number of banks
yet to meet the GH¢60 million recapitalisation level with a scheduled deadline of endyear 2012 has reduced to six (6) from nine (9) beginning of year.
Figure 1: Monthly Trend of CAR
18.00
17.41

17.50
17.00

16.94

17.00

17.42

17.41

17.07

17.27
16.77

17.00
16.49

16.50
16.00

15.54

15.54

15.52

15.50
CAR

15.00
14.50
Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12

Jul-12

1.6 Profitability
Annualised profitability matrix indicates a general improvement in profitability for the
month of July 2012. The operational efficiency indicator, cost-income ratio also
recorded some marginal improvement compared with the end-July 2011 position.
Table 6: Key Profitability Indicators (Annualized)
RATIO

ROE

July

June

May

July

June

May

2012

2012

2012

2011

2011

2011

26.70

26.92

24.67

18.11

18.50

18.99

5

ROA

4.56

4.43

4.28

3.47

3.54

3.71

ROEA

6.27

6.09

5.91

4.86

4.87

5.13

C/I Ratio

55.31

55.79

56.43

61.13

60.09

58.88

% Interest
Payable

4.84

4.61

4.94

6.27

6.10

6.19

Gross yield

14.83

14.35

14.49

16.43

15.70

15.85

Spread

9.99

9.73

9.55

10.16

9.60

9.66

1.7 Compliance with Prescribed Benchmarked
Generally compliance to both prudential and regulatory benchmarks have been high
among industry players. All the banks complied with the 9 per cent primary reserves
requirement. Based on the recently revised benchmarks for NOPs (10 per cent for
single currency and 20 for aggregate currency), 7 banks violated both the single
(dollar or pound or Euro) currency and aggregate net open positions in July 2012. Like
CAR, only one bank was over-exposed counterparty wise, bringing compliance rate to
96 per cent.

2.0

Structure

2.1

Number of Institutions in Operation

Major Banks – 26 (Apex inclusive)

2.2

NBFIs - 53

Rural and Commercial Bank (RCBs) - 137

Forex Bureaux – 334 (Active ones)

Credit Reference Bureau - 3

Approval in Principal (AIP)

RCBs – 1 (Bomasadu)

Forex Bureaux – 40
6

2.3

Banks – 2 (Royal, 1st Capital Plus)

NBFIs – 3

Application for licence in Progress (WIP)

RCBs – 7
Asontaaba Rural Bank Ltd
Adinkra Rural Bank Ltd
Weija Rural Bank Ltd
Tepaman Rural Bank Ltd
Anyaa Rural Bank Ltd
Suhum Rural Bank Ltd
Fumbisi Rural Bank Ltd

NBFIs - 5
CCH Finance House
Abii National Savings and Loans Ltd
NTHC Finance House Ltd
Alpha Capital Savings and Loans Ltd
TLG Capital Savings and Loans Ltd

Forex Bureaux
Fifteen (15) applications are currently being processed for Top
Managements’ consideration

3.0

Microfinance

3.1
Introduction
In line with the Bank’s objective of ensuring the safety, soundness and stability of the
entire banking system, the Bank in July 2011 issued operating rules and guidelines on
microfinance for the information of the general public and for compliance by operators
in the microfinance subsector. The rules and guidelines dealt with categorisation of
7

microfinance institutions into tiers, defined permissible activities, stipulated minimum
paid up capital and other licensing requirements.

3.2 Provisional Licence
Out of over 500 applications received, 224 have been given provisional licences with
the breakdown as follows:
Tier

Description

Number Licensed

2

Deposit Taking

192

3

Money Lending

30

3

FNGO

2

Total

224

Of the 224, 91 institutions have met all the requirements for the issuance of the final
licence. The remaining 133 have up to six months to meet all licensing requirements.
3.3 Capital Requirement
MF-Deposit Taking Tier 2
Not less than GH¢100,000 for one unit office
MF Non-Deposit Taking Tier 3

GH¢60,000

MF Non-Deposit Taking FNGO Tier 3

GH¢60,000

3.4 Charges
Processing fees

GH¢5,000

Final Licence fee

GH¢1,000

3.5 Prudential Returns
All licensed institutions are required to submit returns to the Bank of Ghana. To
deepen their knowledge in the preparation of returns, staff from the MFI Unit have
been organising series of workshops on the prudential returns.
As at end July 2012, 70 institutions have submitted their prudential returns to the
Bank of Ghana. However, only 18 out of this number submitted accurate returns, and
based on the 18 returns submitted, total assets of the subsector stood at Gh
¢40,882.00.
8

3.6

Measures to Reduce Illegal Operations of Microfinance
Institutions
With the approval of management, the Unit had undertaken the following measures:

Published the names of all approved microfinance institutions on the BoG
website.

Staff from the unit engaging in radio and TV talkshows to sensitize the public

Closing down of illegal institutions like Infobank in Kumasi. This is an on-going
exercise and has compelled the illegal institutions to regularise their operations.

Names of the finally approved institutions will be published in the dailies.

4.0
Conclusion
The financial soundness indicators of the banking industry, measured in terms of
earnings, portfolio quality and solvency were strong over the survey period. The
growth in assets was accompanied by high competitiveness in terms of assets,
deposits and credit, as well as increasing intermediation, culminating into improved
profitability matrices. Recapitalisation efforts were stepped in the industry reducing
the number of undercapitalized banks to six in July 2012 from nine (9) beginning of
year. Even though NPL ratio fell, the current interest hikes and exchange rate volatility
could pose a challenge to loan recovery efforts by banks.
Overall, the industry fundamentals present a positive outlook. Going forward,
supervisory effort will focus on the risk management practices and credit
administration of banks in order to sustain financial soundness and ensure effective
and efficient intermediation in the industry.

9