BoG Touts Financial Sector Clean-Up

THE CENTRAL Bank has reiterated that the benefits of the financial sector clean up far exceeded any harm that may have been caused.

Research Director at the Bank of Ghana (BoG), Philip Abradu-Otoo, who spoke on behalf of the Governor of BoG, at a forum organized by the Private Newspaper Publishers Association of Ghana (PRINPAG), recently in Ho, said the exercise had succeeded in safeguarding depositors’ funds, won back the financial stability and confidence in the sector and repositioned the industry to support the country’s economic transformation.

He said the central bank was a meticulous institution which played a very sensitive role in the economy and therefore it considered the advantages and disadvantages of the exercise before carrying that out.      

He commended the media for its support in ensuring that there was constant communication and dissemination of information from the bank to the public and vice versa in such a manner that did not harm the sector.

Successes chalked

Elaborating on the successes chalked from the clean-up and reforms, Natalia Lawson, an economist at the Research Department of BoG said, performance in the banking sector had become stronger after the clean-up and reforms.

She said currently total assets of the banking sector (with 23 banks) stood at GH¢121.0 billion as at October 2019, as against GH¢89.1 billion (with 36 banks) prior to the reforms in 2017.

She also dispelled the notion that confidence in the sector had declined, saying total deposits have increased from GH¢55.7 billion (with 36 banks) compared to GH¢78.9 billion (with 23 banks). This shows “a stronger deposit base owing to more trust and confidence in the banking sector.”

Lawson said the ratio of banks capital to their risk was well above the regulatory limit of 13% to 18.9% as at October 2019.

“There has also been a decline in non-performing loans from 21.9% as at 2017, to 17.3% as at October 2019; proof that banks have improved loan recovery efforts.”

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