BY Nadia Ntiamoah
The banking sector has recorded an impressive turnaround, posting a 46.1 percent surge in profit-after-tax within the first eight months of 2025.
According to the Bank of Ghana’s September 2025 Monetary Policy Report, the sector’s profit jumped to GH¢9.7 billion, up from GH¢6.7 billion recorded in the same period of 2024 — signaling a strong rebound after years of volatility triggered by the Domestic Debt Exchange Programme (DDEP) and high inflationary pressures.
The remarkable performance marks a significant improvement in the financial stability of the banking industry, which just two years ago faced declining profits and rising impairments following government debt restructuring in 2023.
Since then, regulatory reforms, recapitalization drives, and policy measures aimed at restoring confidence have helped the sector regain its footing.
The report noted that profitability was buoyed by strong performance across all income lines.
Other income rose by 47.3 percent in August 2025, a sharp reversal from a 2.9 percent contraction recorded a year earlier.
Net interest income also expanded by 21.8 percent to GH¢19.2 billion, compared to GH¢16.9 billion in August 2024, largely supported by reduced interest expenses following a decline in interbank lending rates.
Interest income for the period increased 21.5 percent to GH¢29.3 billion, while interest expenses climbed to GH¢10.2 billion from GH¢8.4 billion — reflecting a moderated 20.9 percent growth rate, slightly below the 22.1 percent growth recorded in 2024.
Meanwhile, net fees and commissions registered a slower growth of 13.1 percent compared to 22.9 percent a year earlier, showing that although core banking activities grew, the pace of expansion had stabilized.
Overall, the industry’s net operating income surged by 28 percent, nearly tripling the 10.9 percent growth rate recorded in 2024.
Operating expenses also rose modestly by 19.5 percent, driven mainly by increments in staff and administrative costs.
Despite this, provisions for depreciation, bad debts, and impairment losses contracted sharply by 46 percent, compared to a 19.2 percent reduction in 2024, due to improved loan recoveries and asset write-offs.
Crucially, the industry’s profitability indicators showed marked improvement. Return-on-equity (ROE) rose from 31.4 percent in August 2024 to 32.2 percent in August 2025, while return-on-assets (ROA) strengthened from 4.9 percent to 5.6 percent.
These metrics highlight stronger balance sheet performance, improved asset quality, and a more resilient financial system overall.
