Investments grew to GH¢83.9 billion with long-term debt instruments dominating – BoG

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Sat, 11 Jun 2022 Source: www.ghanaweb.com

Loans, advances remain 2nd largest component of banks’ assets, BoG

'Cash and Due from banks increased from 18.6% to 21.7%, BoG

Investments grew to 14.5% in April 2022, BoG

The Bank of Ghana has revealed that investments including bills, securities, and equity grew to GH¢83.9 billion as of the end of April 2022.

This represented a 14.5% growth compared to a growth of 34.9% from April 2021.

The Central Bank noted that its share of “Cash and Due from banks” increased from 18.6% to 21.7%.

However, investments continually dominate the asset mix but the BoG’s share declined from 47.0% in April 2021 to 43.2% in April 2022.

Loans and advances (net), however, remained the second-largest component of banks’ assets recording a higher share of 27.4% in April 2022, from 26.5% in April 2022 due to stronger growth in credit in April 2022.

The data from the Bank of Ghana also stated that banks’ investment portfolio as of the end of April 2022 was largely based on long-term debt instruments.

This was due to higher interest rates on the long-term instruments as against rates on money market instruments.

The Central Bank noted that the share of securities went up from 78.4% in April 2022, to 71.6% in April 2021.

However, the share of short-term bills in total investments was reduced to 21.3%, from 28.1% during the same period comparatively.

It is however expected that the share of bills may increase due to the increase in the Monetary policy rate as banks may prefer the shorter end of the market to take advantage of the increasing yields.

Importantly, the asset and liability structure of the banking industry remained tilted towards less risky assets at end of April 2022.

Source: www.ghanaweb.com
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