Business News of 2026-09-08
Banks' profits dip despite 18.2% rise in fees and commissions
Ghana’s banking sector recorded GH¢7.1 billion in profit by June 2026, representing a slight decline from the GH¢7.2 billion recorded during the same period in 2025, the Bank of Ghana (BoG) has reported.
The latest figures indicate a moderation in banks’ profitability after a strong performance in the previous year.
According to the BoG’s July 2026 Monetary Policy Report, banks’ profits declined by 1.3% year-on-year by June 2026, compared with a 32.6% increase recorded during the same period in 2025.
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Profit before tax also declined by 1.5%, a sharp reversal from the 32.2% growth recorded in June 2025.
The central bank attributed the slowdown largely to lower interest rates, which reduced the amount banks earned from loans and other interest-generating investments.
Interest income comes under pressure
The decline in net interest income was one of the major factors weighing on banks’ profitability during the period.
Net interest income fell by 3.1% by June 2026, compared with a 20.2% increase recorded a year earlier.
The development reflects the impact of lower interest rates on banks’ lending and investment income, as the decline in rates reduced returns from interest-bearing assets.
Despite the pressure on interest income, banks recorded stronger growth in income from fees and commissions.
Income from fees and commissions increased by 18.2% by June 2026, slightly above the 17.8% growth recorded in the corresponding period of 2025.
The increase provided some support to banks’ overall earnings but was not enough to offset the decline in net interest income and the rise in credit-related costs.
Banks keep operating costs under control
The BoG report also showed that banks exercised greater control over their operating expenses during the period.
Operating expenses increased by 6% by June 2026, significantly lower than the 21.4% growth recorded a year earlier.
The slower increase in operating costs helped cushion some of the pressure on banks’ profitability as income growth weakened.
However, the sector faced a significant increase in provisions for bad debts and other impairment-related costs.
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Provisions for bad debts, depreciation and impairment losses increased by 38.2% by June 2026.
This compares with a 14.8% decline in such costs recorded in June 2025.
The sharp rise indicates increased pressure from credit-related and other financial losses, further weighing on banks’ bottom-line performance.
Profitability growth slows
The latest performance suggests that Ghana’s banking sector is moving from the strong profit growth recorded in 2025 to a period of more moderate earnings.
While banks continued to generate significant profits, the combination of lower interest income and higher provisions for bad debts limited overall growth.
The increase in fee and commission income, alongside tighter control over operating expenses, provided some support to earnings.
However, the rise in provisions and impairment-related costs more than offset these gains, contributing to the 1.3% decline in profits by June 2026.
The BoG’s figures therefore point to a changing operating environment for banks, particularly as interest rates continue to influence lending and investment returns.
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