Ghana’s banking industry recorded GH¢9.2 billion in profit after tax (PAT) in the eight months to August 2026, despite a slowdown in earnings growth and a decline in key profitability indicators.
The figure represents a 5.7 per cent decline from the GH¢9.7 billion recorded in the corresponding period of 2025, when the industry’s profit after tax grew by 46.1 per cent.
Profit before tax (PBT) also contracted by 5.7 per cent year-on-year, reversing the strong growth recorded in the same period last year.
According to the October 2026 Banking Sector Development Report, the moderation in profitability reflected slower growth across the banking industry’s major income sources, alongside higher provisions for bad debts, depreciation and impairment losses.
Fees and commissions support income
Fees and commissions income was a notable exception to the broader slowdown, growing by 17.9 per cent in August 2026, compared with 13.1 per cent in August 2025.
However, net interest income, a major source of earnings for banks, contracted by 4.2 per cent, reversing the 21.8 per cent growth recorded a year earlier.
The report attributed the decline largely to the low-interest-rate environment, which dampened banks’ interest earnings.
Growth in other income also slowed compared with the corresponding period of 2025, adding to the pressure on overall earnings.
Operating costs rise at a slower pace
The growth in operating expenses moderated during the review period, increasing by 6.4 per cent in August 2026, down from 19.5 per cent a year earlier.
The slower growth reflected more moderate increases in staff costs and a contraction in non-staff expenses.
However, provisions for depreciation, bad debts and impairment losses rose sharply by 76.3 per cent, reversing the 46.0 per cent contraction recorded in August 2025.
The increase in provisions added pressure to banks’ earnings, despite the slower growth in operating expenses.
Return on equity and assets decline
The slowdown in earnings was also reflected in the industry’s profitability ratios.
Return on Equity (ROE), which measures the returns generated on shareholders’ funds, fell to 22.2 per cent in August 2026 from 32.2 per cent a year earlier.
Similarly, Return on Assets (ROA), which measures how effectively banks use their assets to generate profits, declined to 4.3 per cent from 5.6 per cent over the same period.
The declines indicate that banks generated lower returns on both shareholders’ funds and their assets compared with August 2025.
Interest spread narrows
The banking industry’s interest spread, which measures the difference between interest earned and interest paid, narrowed to 5.9 per cent in August 2026 from 7.9 per cent in August 2025.
Gross yields also declined to 8.1 per cent from 11.6 per cent over the period.
The report further showed that the ratio of gross income to total assets, known as asset utilisation, fell to 7.3 per cent from 9.2 per cent.
Meanwhile, the profitability ratio recorded a marginal decline to 25.3 per cent in August 2026 from 25.4 per cent a year earlier.
The figures point to a banking sector that remained profitable but faced weaker interest earnings, narrowing spreads and higher impairment-related costs during the first eight months of 2026.
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