Analysis of Financial Intermediation and Profitability: “A Case Study of the Ghanaian Banking Industry”

  •  Richard Akoto    
  •  Gladys Nabieu    


The study examines the extent to which banks in Ghana have performed their financial intermediation function and its implication for profitability. Secondary data which was solicited from the Headquarters of the eight largest banks in Ghana was obtained from their financial reports from 2004 to 2010. Using descriptive examination technique, it is observed that all the banks performed creditably well within the period under study though the private banks performed better than the state-owned banks. Additionally, on the average, banks that mobilized the most deposits were also the ones that recorded most loans and advances. Interestingly, the study finds however that banks that made the most loans and advances were not necessarily those that made most profits. It is recommended that to remain profitable in the banking business in Ghana, management must not only put strategies in place to mobilize deposits and make out loans and advances but also institute procedures to efficiently manage cost. Furthermore, government must also put policies in place to motivate banks mobilize more deposits and make out more loans to deepen the financial system.


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