Ghanaian bank capital adequacy at 17.9% says IMF

Accra, Ghana (Capital Markets in Africa):– According to the International Monetary Fund (IMF), the risk-weighted capital adequacy ratio of banks operating in Ghana reached 17.9% at the end of 2014 relative to 18.5% at end-2013 and 18.6% at end-2012; while the banks’ Tier-One capital ratio stood at 15.3% at end-2014, up from 14.7% at end-2013 and down from 16.4% at end-2012. The sector’s core liquid assets were equivalent to 26.8% of total assets at the end of 2014 relative to 21.7% at the end of 2013 and 24.1% at the end of 2012; while they represented 34.8% of total short-term liabilities at end-2014, up from 28.2% at end-2013 and 30.7% at end-2012.

Further, the IMF report highlighted that the sector’s credit-to-assets ratio reached 43.2% at the end of 2014 relative to 42.6% at the end of 2013 and 42.9% at end-2012. Foreign currency liabilities accounted for 8.9% of total liabilities at end-2014, up from 8.5% at end-2013 and 3.5% at end-2012; while foreign currency deposits represented for 31.1% of total deposits at end-2014, compared to 27.1% at end-2013 and 28.9% at end-2012.

In addition, the sector’s non-performing loans (NPL) ratio was 11.3% at the end of 2014, down from 12% at end-2013 and 13.2% at end-2012.  The sector’s provisions-to-NPL ratio decreased to 69.5% at end-2014 from 78.3% at end-2013. In parallel, the banks’ pre-tax return on assets was 6.4% last year compared to 6.2% in 2013, while their pre-tax return on equity reached 44% in 2014 relative to 42.5% in 2013.