The banks’ investment portfolio at the end of April 2022 remained in favor of long-term debt instruments (securities).
This is a response to higher interest rates on long-term instruments relative to rates on money market instruments.
According to Bank of Ghana data, the share of securities increased to 78.4% in April 2022 from 71.6% in April 2021.
However, the share of short-term bills in total investments fell to 21.3%, compared to 28.1% during the same comparative period.
The share of bonds may increase, however, as banks look to the shorter end of the market to take advantage of rising yields in this segment of the market following recent increases in the monetary policy rate (MPR).
The share of investments in equities remains insignificant at 0.3%.
Investments steered less risky assets
It is important to note that the structure of assets and liabilities of the banking sector remained skewed towards less risky assets at the end of April 2022.
Investments including bills, securities and shares increased 14.5% to 83.9 billion yen at the end of April 2022, compared to growth of 34.9% in April 2021.
The Central Bank, however, said that although investments continue to dominate the asset mix, its share fell from 47.0% in April 2021 to 43.2% in April 2022 while the share of “cash and bank receivables increased from 18.6% to 21.7% over the same period. comparative period.
Loans and advances remain 2n/a largest component of bank assets
Loans and advances (net), however, remained the second largest component of bank assets.
It recorded a higher share of 27.4% in April 2022, compared to 26.5% the previous year, due to stronger credit growth in April 2022.