News Guide Africa

Tag: Banking sector

  • Banking sector performance improves significantly as total assets expand to GH¢493.9 billion

    Banking sector performance improves significantly as total assets expand to GH¢493.9 billion

    By Adnan Adams Mohammed

    Ghana’s banking industry has demonstrated robust growth and resilience, with the sector’s total assets expanding by an impressive 26.6 percent to reach GH¢493.9 billion.

    The strong balance sheet performance reflects a broader turnaround in the domestic financial landscape, driven by a surge in investments, rising customer deposits, and a steady recovery in credit lines.

    According to data presented by the central bank, all key financial soundness indicators, including liquidity, solvency, efficiency, and profitability, have experienced an upward trajectory. This structural rebound marks a decisive departure from the macroeconomic headwinds that previously constrained domestic lenders following recent debt exchanges and market restructurings.

    Central bank cautiously optimistic over asset inflows

    Detailing the industry’s recovery path at a briefing following the latest regular meeting of the Monetary Policy Committee (MPC), Bank of Ghana Governor Dr. Johnson Pandit Asiama emphasized that the significant asset growth demonstrates renewed corporate and consumer confidence in the regulated banking space.

    “In spite of some lingering challenges, the banking sector’s performance improved significantly,” Dr. Asiama stated. “Total assets expanded strongly, supported by aggressive growth in domestic deposits, strategically managed borrowings, and improved shareholders’ funds. What we are seeing is a banking sector that is liquid, solvent, and inherently stable.”

    The Governor explained that the massive asset growth was primarily anchored by banking investments, which recorded an exponential jump of 57.5 percent, a sharp contrast to the single-digit investment growth rates captured in previous fiscal periods.

    “Our financial soundness indicators show clear signs of healing across the board. The industry is currently backed by strong liquidity buffers, meaning our financial institutions are more than capable of backing the credit needs of the private economy as the wider recovery takes hold,” Dr. Asiama added.

    Easing non-performing loans and credit costs

    A critical component of the central bank’s optimistic outlook is the visible improvement in asset quality. The industry’s Non-Performing Loan (NPL) ratio declined to 18.7 percent, dropping down from 22.6 percent recorded during the same period last year.

    To sustain this downward momentum, the central bank lowered its benchmark monetary policy rate by 150 basis points to 14.0 percent in March, a move designed to lower borrowing costs for commercial enterprises and minimize default risks.

    “The NPL levels, while declining due to a pickup in bank credit and a contraction in the actual stock of bad loans, still remain elevated and require sustained policy attention,” Dr. Asiama observed. “We are initiating full regulatory guidelines to ensure credit risk management practices are tightly enforced across all universal banks.”

    The central bank chief highlighted that the reduction in the policy rate in March is already translating into direct relief for market actors.

    “We are working actively with commercial banks to scale up financial intermediation. The downward adjustment of the policy rate in March eased the cost of capital, and we are happy to see some prime corporate borrowers already securing credit facilities at rates as low as 11.7 percent,” the Governor remarked.

    Building local shocks and projecting resilience

    Financial sector analysts note that the positive asset performance puts commercial banks in a favorable position to weather anticipated international economic risks, particularly global commodities fluctuations stemming from ongoing geopolitical developments.

    The Bank of Ghana reassured that macro-prudential measures implemented over the last two seasons have successfully ring-fenced the local sector against short-term external shocks.

    “We have proactively built sufficient foreign reserves, currently estimated at about 5.9 months of import cover,” Dr. Asiama stated. “This provides us with an exceptionally strong cushion. Together with fiscal authorities, we are monitoring global developments very closely and stand fully prepared to deploy targeted interventions to maintain the stability we have worked so hard to restore.”

    With domestic deposits steadily climbing and local lenders aggressively reorganizing their capital allocation toward income-generating public and private assets, the sector appears positioned for a highly profitable and resilient close to the current fiscal year.

     

     

     

     

     

  • GCB Bank shatters records with GH¢3.2bn profit …as MD declares institution ‘largest by all metrics’

    GCB Bank shatters records with GH¢3.2bn profit …as MD declares institution ‘largest by all metrics’

    By Adnan Adams Mohammed

    GCB Bank PLC has cemented its position as the titan of Ghana’s financial sector, reporting a historic profit before tax of GHc 3.2 billion for the 2025 financial year.

    This record-breaking performance comes on the back of a strategic overhaul necessitated by the Domestic Debt Exchange Programme (DDEP), which the bank’s leadership describes as a catalyst for building a more “resilient franchise.”

    Speaking at the presentation of the bank’s 2025 financial results, the Managing Director of GCB Bank, Farhan Alhassan, asserted that the bank now leads the industry across every significant benchmark.

    “GCB Bank is currently the largest bank in Ghana by all metrics be it assets, deposits, or even the footprint we maintain across the country,” Mr. Alhassan stated. “Our 2025 performance is not just about the numbers; it is a reflection of a deliberate strategy to stay ahead of the curve in a very challenging environment.”

    The DDEP: A catalyst for innovation

    The record GHc 3.2 billion profit represents a significant milestone for an indigenous bank, especially following the tremors of the 2023 debt restructuring. According to Mr. Alhassan, the DDEP was a “forced rethink” that ultimately benefited the institution.

    “The DDEP forced banks, including GCB, to rethink their strategies. We had to move away from over-reliance on government securities and look deeper into the private sector, digital innovation, and operational efficiency,” he explained.

    This strategic pivot appears to have paid off. The bank’s ability to grow its earnings while managing risk underscores a transition from a traditional lending model to a more diversified, modern banking approach.

    Building a resilient franchise

    Beyond the immediate profit figures, the MD emphasized that the bank’s focus is on long-term sustainability. The 2025 results show a strengthened balance sheet, which Mr. Alhassan attributed to the construction of a “resilient franchise” capable of withstanding future economic shocks.

    The bank’s growth in 2025 was characterized by a surge in digital transaction volumes and a robust expansion in its deposit base, indicating that public trust in the indigenous lender remains at an all-time high.

    “We are not just chasing profits; we are building an institution that will be here for the next 100 years,” the MD noted. “We have focused on capital adequacy and liquidity, ensuring that as we grow, we remain the safest harbor for our depositors’ funds.”

    Market leadership

    With total assets and deposits now outstripping all local and international competitors in the Ghanaian market, GCB Bank’s 2025 performance sets a high bar for the rest of the industry. The bank’s leadership believes that its unique position—combining the reach of a state-linked institution with the efficiency of a modern private lender gives it an unassailable edge.

    As the industry reflects on a year of “historic recovery,” GCB Bank stands at the summit, proving that the challenges of the past few years have only served to sharpen its competitive edge.

    Industry analysts expect that GCB’s performance will encourage further private-sector lending in 2026, as the bank looks to deploy its record earnings into supporting the broader Ghanaian economy.

     

     

     

  • 2025 bank profits signal ‘golden era’ for Ghanaian lenders

    2025 bank profits signal ‘golden era’ for Ghanaian lenders

    By Adnan Adams Mohammed

    The Ghanaian banking sector has transitioned from the turbulent waters of the Domestic Debt Exchange Programme (DDEP) into an era of unprecedented prosperity.

    Financial statements for the year ending 2025 reveal a landscape where record-breaking profits are no longer the exception, but the standard. From indigenous giants to international subsidiaries, the industry’s recovery has been characterized by triple-digit growth, aggressive asset expansion, and a masterful recalibration of risk.

    As we analyze the 2025 performance of major players like GCB Bank, Stanbic, ADB, OmniBSIC, and Zenith Bank, a clear narrative emerges: the Ghanaian banking sector has not just recovered, it has been redefined.

    The titans of scale: GCB and Stanbic

    Leading the charge is GCB Bank, which shattered local records by posting a staggering GHc 3.2 billion profit before tax. As the nation’s largest indigenous lender, GCB’s performance is often a bellwether for the broader economy. Its ability to cross the 3-billion-mark suggests a successful pivot toward high-yield digital services and a robust management of interest margins in a stabilizing inflationary environment.

    In tandem, Stanbic Bank Ghana demonstrated the resilience of international banking frameworks. Posting a 38% growth in profit, Stanbic’s narrative was one of “strengthening momentum.” Unlike the volatile swings seen in smaller players, Stanbic’s growth reflects a disciplined capture of corporate and investment banking value, proving that even at a high baseline, significant expansion is possible through operational efficiency.

    The recovery kings: ADB and NIB

    Perhaps the most emotive stories of 2025 come from the state-linked institutions. The Agricultural Development Bank (ADB) completed a “remarkable recovery,” recording GHc 367.2 million in profit after tax. For a bank that faced significant headwinds during the debt restructuring era, this turnaround is a testament to a tightened credit risk framework and a renewed focus on its core mandate—agribusiness value chains.

    Similarly, the National Investment Bank (NIB) has moved from the brink of systemic concern to a “leadership-led revival.” The blueprint for NIB’s restoration involved a painful but necessary cleaning of the balance sheet and a strategic realignment with national industrialization goals. The 2025 results for these two institutions signal that the “too big to fail” era has been replaced by an “efficient enough to thrive” era for state-owned banks.

    The agility play: OmniBSIC and Zenith Bank

    While the giants moved the needle in absolute terms, OmniBSIC Bank emerged as the growth champion of the year. Delivering a breathtaking 104% profit growth, the bank also saw its assets and deposits double. This suggests a massive gain in market share, likely fueled by aggressive retail expansion and a “customer-first” digital strategy that has lured depositors away from more traditional, slower-moving competitors.

    Zenith Bank Ghana also neared a historic milestone, with earnings approaching the GHc1 billion mark. Zenith’s performance underscores the profitability of the mid-to-top tier segment, where lean operations meet high-value trade finance and treasury operations.

    Comparative analysis: what drove the boom?

    Industry experts point to a number of critical factors that defined this “golden year”. However with the performance narrative of the abovementioned institutions, four common threads emerge:

    The Yield Environment: Despite the DDEP, banks successfully rebalanced their portfolios toward high-yielding cocoa bills, revised statutory papers, and private sector lending with higher risk-adjusted returns.

    Digital Transformation: The 2025 profits were largely “paperless.” The cost-to-income ratios across GCB, OmniBSIC, and Zenith showed marked improvement as more customers migrated to mobile and internet banking, reducing the overhead of physical brick-and-mortar branches.

    Deposit Growth: In a surprising show of public confidence, deposits doubled for players like OmniBSIC. This indicates that despite previous economic shocks, the Ghanaian public still views the banking system as the safest harbor for their capital.

    Asset Quality: A renewed focus on rigorous credit risk assessment has kept non-performing loans (NPLs) in check, even as banks begin to expand lending to the private sector.

    Bank Key Metric (2025) Strategic Driver

    GCB Bank GHc 3.2bn PBT “Largest by all metrics”; Scale & diversification

    OmniBSIC 104% Profit Growth Aggressive deposit & asset expansion

    Stanbic 38% Profit Growth Sustained earnings momentum

    ADB GHc 367.2m PAT Remarkable recovery & agribusiness focus

    Zenith Bank ~GHc 1bn Earnings Robust corporate & treasury operations

    The path ahead: sustainability or a one-off?

    While the profits are historic, the 2025 results also set a high bar for the coming year. As the Bank of Ghana continues its regulatory oversight, the focus for 2026 will likely shift from pure profit recovery to the sustainability of these margins and the role of these banks in driving Ghana’s broader industrial and agricultural growth.

    The performance also invites scrutiny. Critics argue that these “historic profits” are partly a result of the high-interest-rate environment that burdens the borrowing public and SMEs.

    However, the “Leadership Blueprint” seen at NIB and the “Earnings Momentum” at Stanbic suggest that these gains are more than just a byproduct of high rates; they are the result of structural reforms. As the central bank continues to monitor capital adequacy ratios, the 2025 windfall provides the necessary cushion for banks to begin lending more aggressively to the private sector in 2026.

    Expert’s remarks

    Banking experts who commented on the performance acknowledged that the 2025 fiscal year will go down in history as the year the Ghanaian banking sector “broke the glass ceiling” as a master class in resilience and strategic growth.

    As GCB’s MD Kofi Adomakoh rightly stated, the DDEP was the catalyst that forced a “rethink.” Implicitly, the historic profits of 2025 are not merely the result of high interest rates or favorable treasury yields. Instead, they are the fruits of a fundamental shift in the Ghanaian banking “DNA.”

    From GCB’s GHc 3.2 billion milestone to OmniBSIC’s 100% growth, the data confirms a sector that is capitalized, liquid, and hungry for further expansion.

    For the Ghanaian consumer, the hope is that these record profits will eventually translate into lower lending rates and more accessible credit, fueling the next phase of national economic growth.

     

     

     

     

     

     

     

     

     

     

     

  • Ghana’s economy to grow further amidst forex stability – Fitch

    Ghanaian currency and forex

     

    Adnan Adams Mohammed

    Fitch Ratings is optimistic of Ghana’s economy developing strong resistance against external shocks this year with real GDP growth projected to increase.

    The cedi’s exchange rate is expected to stabilise within the year and inflation also expected to decline.

    These improvements in the key  macroeconomic performance  indicators and the operating environment are predicted to absorb any further shocks to the banking sector’s capital base, following the deterioration inflicted by the domestic debt exchange programme and the surge in the non-performing loans ratio.

    “Solvency pressures stemming from Ghana’s (public debt) default have not translated into heightened liquidity pressures. This is primarily due to the sector’s funding structure, which is dominated by domestic deposits, and therefore includes limited market and external debt”, explained the latest Fitch report on Ghana, published last week.

    “Foreign-currency liquidity coverage is expected to remain high, but local-currency liquidity remains reliant on treasury bills.”

    The report added, “The Eurobond exchange, completed in October 2024, has improved Ghana’s access to international finance and lowered local-currency liquidity pressures, which resulted in Fitch upgrading Ghana’s Long-Term Local-Currency Issuer Default Rating to CCC+ from ‘CCC’.”

     

    Meanwhile, the Ghanaian banking sector is projected to have brighter prospects as solvency recovers from the sovereign default and operating environment pressures reduce.

    These factors come as the sovereign external debt restructuring nears completion and the economy begins to stabilise, says Fitch Ratings in its new special report.

    “These themes underpin our improving outlook for the Ghanaian banking sector in 2025. The sector’s strong profits in 2023 and 2024 were a result of high yields on treasury bills. High profits are driving a recovery in capital after the Domestic Debt Exchange Programme (DDEP) imposed large losses on the sector after its launch in December 2022. The full capital impact continues to be disguised by regulatory forbearance and accounting treatment, but we believe strong profits will support a further capital recovery in 2025, ensuring the vast majority of banks are capital-compliant by end-2025 when regulatory forbearance expires.”

    Ghana’s DDEP concluded in 2023 and Fitch expects the external debt restructuring to be completed in early 2025.

    While the sector shows signs of strength, challenges persist. The non-performing loan (NPL) ratio climbed to 22.7% in October 2024 from 18.3% a year earlier, the Bank of Ghana (BoG) reported in its November 2024 Monetary Policy Committee (MPC) statement.

    Fitch projects that high yields on government securities will continue to strengthen banks’ capital positions in 2025, setting the stage for sustained recovery. However, adherence to strict credit standards and effective recapitalisation will be critical to addressing lingering vulnerabilities.

     

  • Parliament approves over US$40mn tax waivers.

     

    Parliament

     

     

    Adnan Adams Mohammed

     

    Parliament of Ghana has approved a €1.5 million tax waiver for the supply and installation of integrated e-learning laboratories in Senior High Schools.

     

    Additionally, a US$38.66 million tax waiver was granted for import duties, Import VAT, Import NHIL, Import GETFund Levy, Exim Levy, Special Import Levy, and other fiscal reliefs on materials and equipment imported by the Ghana Bauxite Company (GBC) as a strategic investor.

     

    This is because government’s stake in GBC increased to over 23.8% due to capital injection and the tax waiver, which has boosted production from 500,000 to over one million tons. This expansion aims to create jobs and ensure the company pays the required taxes.

     

    The Chairman of Parliament’s Finance Committee, has praised the Minority caucus for supporting recent tax waivers approved by the legislature, describing it as a significant step towards deepening parliamentary collaboration.

     

    “The beauty of these approvals is that the Minority supported it”, Patrick Yaw Boamah acknowledged. “Sometimes there is some misunderstanding regarding tax waivers, but their position is that when the government takes an interest in some of these entities, they will support it. We commend the Minority for coming on board.”

     

    Mr. Boamah, who is also the Member of Parliament for Okaikoi Central in the Greater Accra Region, noted that his Committee faced a challenge in approving a US$250 million World Bank facility meant to support the financial sector due to a different approach by the Minority.

     

    He said, “We are having a little challenge with regards to the US$250 million World Bank facility aimed at supporting the financial sector.

     

    The banks went through a difficult time during DDEP.

     

    If you read the budget, the government said they were going to support the financial sector through the Ghana Financial Sector Stabilisation Fund, with a cedi equivalent of US$500 million, and also seek World Bank financing of US$250 million.

     

    In all, a pool of GH₵15 billion is what the government is seeking to mobilize to support the banking sector.

     

    The challenge is that the Minority wants a fund legally established through an act of Parliament. However, this is a credit line from the World Bank where the banks would apply, and an analysis would be made before disbursement, different from creating a fund like the Road Fund, Zongo Development Fund, or Special Initiative Funds that we are all used to. So, a decision was taken at the committee by Majority decision.”

     

    The Finance Committee has outstanding reports expected to be approved before adjournment, including the report of PIAC on the management and use of Petroleum Revenues for the period January to December 2021, the Reconciliation Report on the Petroleum Holding Fund for 2021, and the Semi-Annual Report of the BoG on the Ghana Petroleum Funds for the period July 1 – December 31, 2020

     

     

  • Govt recapitalizes state interest banks by September

    By Elorm Desewu

    The government plans to recapitalize all the state interest banks in the country by the end of September this year.

    Cabinet has approved an amount of GH¢22.8 billion or 2.6% of GDP to further strengthen the financial system and rebuild capital buffers to improve resilience. This overall resource envelope will be deployed under the framework of the Ghana Financial Stability Fund (GFSF) in phases with an initial commitment of the Ghana Cedi equivalent of U$750 million.

    The initial commitment will consist of a funded portion of US$250 million from the World Bank/IDA and US$500 million to be funded from the issuance of marketable debt to help rebuild capital buffers of affected banks and other eligible financial institutions.

    The support for the financial system under the GFSF framework will be based on transparent eligibility criteria for Financial Institutions (FIs) which include full participation in the DDEP, a viable capital restoration plan notwithstanding the GoG debt restructuring impact (discounting regulatory forbearance and other reliefs), and existing GoG/GAT equity participation.

    Under the GFSF framework, Government’s direct budget funding will focus on ensuring the recapitalization of state interest banks such as GCB, CBG, ADB and NIB, among others. Specifically, all state interest banks will be capitalised by endSeptember 2023. Government will also streamline the strategic focus of all stateowned banks to ensure that they better support areas of the economy such as agriculture, industry, and key SMEs.

    The Bank of Ghana expects banks to submit recapitalization plans with regulatory approval for such plans scheduled for end-September 2023.

    For privately owned FIs, a commitment will be required from other shareholders to inject additional capital to complement GoG’s funding support to ensure that dilution of private shareholders is kept to a minimum.

    Evidence of strong governance and prudent management is also required to be demonstrated. For example, banks which are to benefit from the arrangement must achieve a minimum of 75 percent implementation rate of the most recent on-site examination prescriptions, and full compliance with the BoG’s Corporate Governance Directive, Cyber Security Directive, and Risk Management Directive.

    Government will also strengthen and preserve the resilience of the insurance industry, including the recapitalization of the stateowned SIC Life Insurance Company, and work to restore normalcy in the debt capital market to improve liquidity, especially for capital market institutions. This is important in positioning the country to continue to expand the frontiers of private sector growth.

    The Government will also support GAT-assisted banks and other locally controlled privately-owned banks that request assistance from the GFSF in line with the operational framework agreed with the IMF and the World Bank. The World Bank facility under the GFSF will provide a debt only (non-equity dilution) capital support to banks, both foreign-owned and locally-owned to support their strong recovery post the DDEP.

    The Ministry of Finance is working with the Bank of Ghana and other regulators to ensure that the framework of the GFSSS is finalised, and its operationalisation commences immediately after the approval of the Mid-year budget.