The World Bank has reported that more than half of the 23 banks operating in Ghana are well-positioned to avoid the need for recapitalisation.
According to the Bank’s 8th Ghana Economic Update report, most banks have successfully achieved over two-thirds of the required recapitalisation target within a year, ahead of the original three-year timeline.
The Bank of Ghana anticipates that the early completion of these recapitalisation efforts will strengthen the banking sector’s resilience, enabling it to provide robust support for the recovery of the real economy.
Furthermore, the Bank of Ghana noted that banks affected by the Domestic Debt Exchange Programme (DDEP) in 2023 continue to implement their approved capital restoration strategies in accordance with the Central Bank’s guidelines.
The 8th Ghana Economic Update from the Bretton Woods institution highlighted that the banking sector is now stronger and better capitalised than during the DDEP, with increased profitability, though some emerging risks remain.
Specifically, banks have seen significant improvements in profitability, with return-on-equity after-tax surging to 34.2% in December 2023, up from -34.4% in December 2022. Similarly, return-on-assets increased to 5.4% from -3.8% over the same period.
The Capital Adequacy Ratio (CAR) remained relatively high at 13.9% in December 2023, comfortably exceeding the revised prudential minimum of 10.0%, as losses from the domestic debt restructuring were not fully accounted for due to regulatory relief.
