The BoG said the banking sector was particularly strong in 2023as the sector recorded GHS8.3 billion in profit from a loss of GHS6.6 billion in December 2022.

This was disclosed in the Monetary Policy Report for January 2024, which highlighted the economic and financial sector assessments that the Monetary Policy Committee of the BoG considered prior to the policy decision during the 116th meeting.

The BoG said the growth outturns of key income lines contributed to the improved profit performance of the banks in 2023.

"Net interest income grew by 41.5 percent in 2023, compared to a growth of 18.7 percent in 2022. Fees and commissions grew by 22.7 percent in 2023, relative to a growth of 25.2 percent in 2022."

It said the increased growth in net interest income in December 2023 was on account of higher interest income on loans and investments from increased lending rates and interest rates on money market instruments.

"The moderation in interest expenses, which is attributed to the contraction in borrowings observed during the year, also contributed to the higher growth in net interest income in December 2023 relative to December 2022," the report said.

Banks reported lower impairments on financial assets in 2023, also contributing to the improved profit performance during the year.

Total provisions and impairments contracted by 79.2 percent in December 2023, after increasing sharply in December 2022 on account of the huge impairments on restructured bonds.

Operating expenses, on the other hand, recorded a higher growth of 34.9 percent in December 2023, relative to the 27.2 percent growth in December 2022, driven by the higher growth in other operating expenses and staff costs," the BoG said.

In a related report, Fitch Solutions, an international rating agency, disclosed that the bank's profitability in 2023 minimised the impact of the DDEP.

The rating agency also attributed the profitability to the capital-raising initiatives encouraged by the Bank of Ghana (BOG) through the Ghana Stabilisation Fund (GSF), which it said will continue to support the recovery in capitalization.

The losses due to the DDEP were said to have cost the Ghanaian banks an amount of GHS 37.7 billion, with private and domestic banks losing GHS 19.9 billion while their foreign- owned counterparts lost GHS 17.7 billion.