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Banks profit grows by 27.4% to GHC3.17 billion in August 2021: BoG report

Profit before tax for the first eight months of the year recorded a growth rate of 27.4%, higher than the 19.2% recorded a year ago, a new Bank of Ghana (BoG) report has stated.

Profit before tax for the first eight months of the year recorded a growth rate of 27.4%, higher than the 19.2% recorded a year ago, a new Bank of Ghana (BoG) report has stated.

According to the September 2021 Banking Sector Development report, banks registered GHC3.17 billion in profits in August 2021, compared with GHC2.72 billion during the same period last year.

The report noted that the higher growth outturns for key income lines of banks relative to the same period last year contributed to the strong profit performance during the review period.

However, an increase in the growth of interest expenses, associated with the increase in growth in deposits and borrowings this year compared to last year, culminated in marginally lower growth in net interest income.

The report further indicated that net interest income increased by 17.9% in August 2021 compared to a growth of 18.7% in August 2020. The strong growth in contingent liabilities and trade finance activities supported the growth in net fees and commissions by 21.8% in August 2021, higher than the increase of 8.9% in August 2020.

On loans projections, the report said banks have projected an increase in overall demand for loans by corporates and households in the subsequent two months. The projection of an increase in demand for loans by enterprises is expected to come from increases in demand from all sub-components of corporate loans.

The expected increase in demand for household loans over the next two months is, however, projected from a rebound in demand for mortgages while demand for consumer credit is expected to soften following the sharp increase in the prior two months.

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