Shareholders’ funds of banks in Ghana surged by 48.5% to GH¢48.0 billion in the first half of 2025, according to the July 2025 Banking Sector Development Report released by the Bank of Ghana (BoG). This compares with a growth of 44.9% recorded during the same period in 2024.

The central bank attributed the strong growth to a rebound in industry profits and recapitalisation efforts by undercapitalised banks, signaling improved financial stability across the sector.

Investment Portfolio Shifts Toward Short-Term Instruments

The report highlighted that bills (short-term debt instruments) became the largest component of banks’ investment portfolios, increasing their share to 60.3% in June 2025, up from 39.9% in June 2024.

Conversely, the share of long-term securities declined sharply to 39.4% from 59.8% over the same period, indicating a shift in banks’ investment preferences toward shorter-term instruments.

The share of equity investments remained minimal and unchanged at 0.3%.

Asset and Liability Structure

The asset composition of the banking industry as of June 2025 reflected a clear preference for investments over other asset classes.

Investments — including bills, securities, and equities — overtook cash and bank balances as the largest component of total assets, rising to 42.3% in June 2025 from 33.2% a year earlier. The report noted that banks were rebalancing their portfolios to take advantage of higher yields on investments.

Cash and bank balances followed as the second-largest asset component, though its share declined to 28.9% from 35.8% in June 2024. Together, investments and cash balances accounted for 71.2% of total assets, up from 69.0% in the previous year.

Net loans and advances made up 19.0% of total assets, down from 21.4% in June 2024, indicating a cautious lending stance by banks.

Non-earning assets—such as fixed and other assets—recorded a marginal increase to 9.9% from 9.6% over the review period.

Liability Composition

On the liabilities side, customer deposits continued to dominate but their share declined to 72.9% in June 2025 from 76.1% a year earlier.

At the same time, borrowings rose to 8.6% from 7.2%, reflecting an increase in banks’ reliance on borrowed funds to support operations and manage liquidity.

The BoG report underscored that while banks remain profitable and adequately capitalised, the ongoing shift toward investment instruments highlights a strategy aimed at maximising returns amid evolving market conditions.