Governor of the Bank of Ghana, Dr. Ernest Addison, has provided reassurance that the second round of the Domestic Debt Exchange Programme (DDEP) will not significantly impact the fortunes of banks.

The government is presently carrying out this program to restructure the domestic dollar bonds and cocoa bills. Some concerns have been raised that this exercise might affect the positive performance of banks, which recorded half-year profits exceeding ¢5 billion.

Nevertheless, Dr. Addison, addressing journalists after the Monetary Policy Committee Meeting of the Bank of Ghana, expressed confidence that the banks' performance would remain sustainable despite the ongoing debt exchange programme.

“We don’t expect any negative impact on the books of the bank with this next exercise. The data submitted by banks for the first half of 2023 reflected the lingering effects of the DDEP, notwithstanding the strong rebound in profitability following significant losses incurred at year end 2022 on account of impairments of holdings in GoG bonds”, he said.

He added that the banking industry’s total assets as at June 2023 was ¢242.4 billion, showed a moderation in growth of 21.2 percent from 22.8 percent in June 2022.

“Total deposits grew significantly by 42.8 percent to ¢187.6 billion in June 2023, relative to ¢131.3 billion, representing 19.1 percent growth in June 2022. Total borrowings however contracted by 39.1 percent to GH¢16.0 billion compared with ¢26.4 billion a year earlier”.

The Governor of the Bank of Ghana announced that the banking industry witnessed a significant increase in investments, mainly driven by substantial growth in deposits.

Total investments surged to ¢89.9 billion in June 2023, up from ¢81.0 billion in June 2022.

This increase comprised short-term investments, which experienced a remarkable growth of 149.6 percent, reaching ¢39.9 billion compared to ¢15.9 billion the previous year.

However, medium-to-long-term investments declined to GH¢50.1 billion from ¢65.0 billion due to portfolio rebalancing following the DDEP (Domestic Debt Exchange Programme).

Furthermore, the banking sector's profitability showed improvement in the first half of 2023.

Net interest income saw a significant increase of 41.4 percent, amounting to ¢9.9 billion, compared to a 12.4 percent increase recorded a year ago. Net fees and commissions also grew by 30.6 percent to ¢2.2 billion, compared to 27.0 percent growth over the same period last year.

Consequently, the operating income surged sharply by 46.1 percent, surpassing the 22.6 percent growth recorded in the previous period.