Factors Influencing the Performance of Universal Banks in Ghana: A Bibliometric Review

A strong banking or financial sector is a reflection of a strong economy. The banking industry in Ghana has undergone significant developments over the last few decades. This paper presents a bibliometric review of the factors that influence the performance of universal banks in Ghana, using Ecobank Ghana PLC as the case. An explanatory research design with a case study strategy was adopted, and a quantitative approach was used to examine the relationships among the variables. The data were from audited reports for the 10 years 2012 to 2021 and the published financial statements of the bank. Analysis was done using Microsoft Excel and STATA. Results showed that the current asset ratio, which represents the liquidity position of banks, asset quality, gross domestic product, and inflation, significantly affected banks' performance in the long run.  In the short run, the banks' previous period's profit, Bank of Ghana’s (BoG's) monetary policy rate, and inflation are the critical bank performance-driven factors. The conclusion is that within the medium to long term, banks must ensure that they are liquid by pursuing rigorous policies to safeguard the quality of their assets, especially in the arena of loan provision and its subsequent repayments. The growth performance of the economy and inflationary pressures must be monitored closely by the banking sector. In the short term, BoG's policy changes and inflation are critical influences. Therefore, the study recommends that BoG must ensure strict adherence to its reserve requirements by all industry players. Thus, BoG must fortify its offsite and onsite monitoring while Banks must hedge strategically against the factors that generate market risks.

A strong banking or financial sector is a reflection of a strong economy. The banking industry in Ghana has undergone significant developments over the last few decades. This paper presents a bibliometric review of the factors that influence the performance of universal banks in Ghana, using Ecobank Ghana PLC as the case. An explanatory research design with a case study strategy was adopted, and a quantitative approach was used to examine the relationships among the variables. The data were from audited reports for the 10 years 2012 to 2021 and the published financial statements of the bank. Analysis was done using Microsoft Excel and STATA. Results showed that the current asset ratio, which represents the liquidity position of banks, asset quality, gross domestic product, and inflation, significantly affected banks' performance in the long run.  In the short run, the banks' previous period's profit, Bank of Ghana’s (BoG's) monetary policy rate, and inflation are the critical bank performance-driven factors. The conclusion is that within the medium to long term, banks must ensure that they are liquid by pursuing rigorous policies to safeguard the quality of their assets, especially in the arena of loan provision and its subsequent repayments. The growth performance of the economy and inflationary pressures must be monitored closely by the banking sector. In the short term, BoG's policy changes and inflation are critical influences. Therefore, the study recommends that BoG must ensure strict adherence to its reserve requirements by all industry players. Thus, BoG must fortify its offsite and onsite monitoring while Banks must hedge strategically against the factors that generate market risks.