BY ISSAH OLEGOR
Ghana’s banking sector delivered a sharp rebound in profitability in 2025, with banks collectively recording GH¢23 billion in profit before tax, a 39.8 per cent increase from the GH¢16.5 billion recorded in 2024.
The strong performance, according to the PwC Ghana Banking Survey 2026, reflects a combination of higher investment income, increased trading gains and a significant reduction in impairment losses on loans.
The development marks a notable improvement in the financial position of the banking industry following years of balance-sheet pressures and restructuring in the sector.
However, the latest figures also reveal a banking industry that remains heavily exposed to developments in the government securities market, foreign-exchange movements and the quality of its loan portfolios.
The survey shows that banks’ total income rose by 24.1 per cent, from GH¢35.5 billion in 2024 to GH¢44.1 billion in 2025.
Profitability therefore grew considerably faster than overall income, resulting in an improvement in the sector’s profit-before-tax margin from 46.3 per cent to 52.2 per cent.
PwC attributed the improvement largely to stronger earnings from investment securities, higher net trading income and a substantial fall in net impairment losses.
The figures suggest that banks were able to convert a greater proportion of their earnings into profits despite facing higher operating costs during the year.
Investment income emerged as one of the most important drivers of the sector’s performance.
According to the survey, investment income increased by GH¢7.8 billion, representing a 45.2 per cent rise in 2025.
The increase is particularly significant because it occurred against a backdrop of declining average interest rates on key government Treasury bills. The average rates on the 91-day and 182-day Treasury bills fell by approximately 10.8 per cent and 11.1 per cent respectively.
Despite the lower yields, banks significantly increased the volume of investment securities they held.
PwC reported that banks’ investment securities increased by 57.6 per cent during the year, providing a larger asset base from which the institutions could generate investment returns.
The report also linked the development to a Bank of Ghana directive requiring banks to hold reserves in the same currency as the deposits underlying those reserves.
The resulting increase in Ghana cedi liquidity within the banking system allowed banks to deploy more funds into securities, contributing significantly to their investment income.
Foreign-exchange movements also played a major role in the improvement in banks’ earnings. Net trading income increased by GH¢2.4 billion, equivalent to a 43.5 per cent rise during 2025.
PwC said the increase was largely driven by foreign-exchange translation and transaction gains.
The gains were associated with banks maintaining net short foreign-currency positions in accordance with Bank of Ghana policies, alongside the strengthening of the Ghana cedi.
However, the benefit was not uniform across the industry.
The survey noted that the impact of foreign-exchange movements differed from bank to bank, depending on the size of their foreign-currency exposures and individual trading strategies.
The development nevertheless provided another important source of earnings for the banking industry during the year.
Perhaps one of the most significant changes in the sector’s financial performance was the dramatic reduction in impairment losses.
Net impairment losses fell by 75.9 per cent, from GH¢3.5 billion in 2024 to just GH¢841 million in 2025.
The reduction followed an industry-wide clean-up of loan portfolios towards the end of 2025 after a Bank of Ghana directive.
Despite the portfolio clean-up, banks recorded relatively contained impairment charges. PwC attributed this partly to adequate collateralisation and the full provisioning of non-performing loans.
Impairment reversals and recoveries from existing loans also contributed positively to banks’ bottom lines.
According to the survey, the development could indicate improvements in banks’ credit-management practices and their capacity to identify and manage potential credit losses.
The improved profitability did not come without additional costs.
Operating expenses increased by approximately 26.5 per cent, rising from GH¢16 billion in 2024 to GH¢20.2 billion.
The increase reflects continued pressure on banks’ operating structures, but the growth in income was sufficient to absorb the additional expenditure.
As a result, the industry’s profit-before-tax margin still improved substantially, rising by 5.9 percentage points to 52.2 per cent.
The figures indicate that although banks spent more to operate their businesses, the increase in revenue was strong enough to generate significantly higher profits.
The 2025 results provide evidence of a major improvement in the profitability of Ghana’s banking industry. However, PwC’s assessment suggests that banks cannot assume the exceptional performance will automatically continue.
The sector is entering an environment in which investment yields are declining, meaning banks may have less room to rely on securities income to sustain the same level of returns.
At the same time, the industry must continue to protect the quality of its loan portfolios while controlling rising operating expenses.
PwC therefore cautioned banks to maintain strong asset-quality management, exercise cost discipline, diversify their income sources and adjust their business models to changing market conditions.
The challenge for banks will be to move beyond gains generated by favourable market conditions and build sustainable earnings through stronger core banking operations.
The latest figures come against the background of the banking-sector reforms, which placed considerable emphasis on strengthening banks’ balance sheets, addressing non-performing loans and improving financial-sector resilience.
The 2025 performance suggests that many institutions are now operating from a stronger financial position than in previous years.
