Empirical Analysis of the Financial Performance of Listed Banks in Ghana

Abstract

Notwithstanding the challenges facing the financial markets and the current global economic growth prospects, the listed banks that are operating in healthy situation will remain resilient. The study sought to investigate the financial performance of listed Banks Ghana during the period of 2015 to 2018. Financial ratios were used to assess the financial performance (profitability), liquidity, credit performance and capital structure (capital adequacy). Bar charts and line graphs were used to analyse the panel data and the findings indicate that among ROA, ROE, ROD and NIM, net interest margin (NIM) is the best measure of profitability. The findings of the study also showed that the liquidity position of these banks is very alarming and aggravating as most the banks have poor liquidity issues making depositors vulnerable of losing their investments. The findings again revealed that the credit performance of the banks is very abysmal as a result of ineffective and inefficient credit assessments resulting in bad loans. In evaluating the capital adequacy ratio, it was evident that the banks were highly undercapitalised which vindicates the effort and the stringent measures by bank of Ghana for its intensified regulations. This study suggests managerial and policy recommendations regarding the development and enhancing of some banking operations which will boost the banks' profitability, liquidity, credit performance and improve the capital adequacy challenge for the banks.