Editorial: Banks urged to deepen support for trade finance and regional integration

Dr. Asiama urges banks to avoid automatic rate hikes. He wants them to maintain credit support for key sectors. This is crucial for economic recovery.

His comments come during ongoing financial sector reforms. The sector is recovering from two major disruptions: the banking clean-up and the Domestic Debt Exchange Programme (DDEP).

Dr. Asiama believes the financial system is robust. Recent data from the Bank of Ghana (BoG) supports this view. By February 2025, total banking assets grew by 34.05 percent year-on-year. Deposits also increased by 27.89 percent.

The Capital Adequacy Ratio (CAR) stands at 14.35 percent, above the 10 percent minimum requirement. However, risks remain due to solvency challenges in some banks.

Recapitalisation efforts are still incomplete for domestically controlled and state-owned banks. BoG is working with these institutions to address capital shortfalls and restore depositor trust.

Non-performing loans (NPLs) are still high, with a gross NPL ratio of 22.57 percent due to legacy issues. Even after adjustments, the NPL ratio remains at 8.93 percent.

This situation calls for better credit risk management and underwriting standards. To tackle emerging challenges, BoG is enhancing its supervisory capabilities.

A new Resolvability Assessment Framework is being developed for crisis preparedness. The Governor stressed a shift towards proactive supervision rather than reactive enforcement.

Key priorities include risk-based analytics, sustainability assessments, and improved governance practices. Dr. Asiama also encouraged banks to support trade finance and regional integration through platforms like PAPSS.