Numbers that Move Finance: The banking profit surge

By Surv. Prof. Forster Sarpong

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Ghana’s banking industry closed the first half of 2025 with profits that are hard to ignore: profit-after-tax rose 32.6% to GH¢7.2 billion and profit-before-tax climbed 32.2% to GH¢10.8 billion versus June 2024.

The Bank of Ghana (BoG) attributes the uplift to stronger interest income, a sharp rebound in other income, and lower impairments, with net interest income up 20.2% to GH¢14.2 billion, other income up 52.2%, and operating income up 24.4%.

Deposits reached GH¢280.1 billion and banks tilted their balance sheets further toward investments (42.3% of assets). These are the numbers that move finance and they sit alongside two large policy-rate cuts in July (-300 bps to 25%) and September (-350 bps to 21.5%), which reset the cost of money heading into 2026.

The Government Economic Agenda: Space, Signals, and Trade-offs

Fiscal space & market signals.

Fatter bank profits and healthier capital/asset-quality indicators lower systemic risk and help the sovereign’s funding program: a more resilient banking system can better absorb GoG bills/bonds at auction, smoothing rollover risk and borrowing costs.

With policy rate down to 21.5% (Sept 17, 2025) and disinflation gathering pace through Q3, Treasury funding costs should trend lower on a lag, aiding consolidation targets in the 2025 Mid-Year Fiscal Policy Review (fx stability measures, deficit reduction, reserve build). The feedback loop is clear: safer banks , steadier auctions and smoother disinflation path.

Intermediation & growth.

The BoG’s Credit Conditions Survey shows improving household credit demand and steady large-corporate appetite, exactly what the policy easing aims to catalyze. As profit retention strengthens capital and impairments ease (–14.8% YoY in June), banks can expand lending without jeopardizing buffers, supporting the real-sector growth agenda in manufacturing, construction, and trade.

Risks to watch.

The headline NPL ratio remains elevated even if improving. Government and BoG must keep pressure on loan recovery frameworks and underwriting standards so that cheaper money does not morph into weaker credit quality, especially as rate cuts work through pricing and volumes.

Businesses and Corporates: Margins, Money-Markets, and the Cost of Capital

Lower policy rate, lower hurdle rate.

Two consecutive policy cuts, July’s –300 bps and September’s –350 bps should, with a lag, ease base lending rates and the corporate weighted average cost of capital. Expect refinancing windows for working-capital facilities and term loans, improved debt-service coverage, and more viable capex at current demand levels.

Cash-management tailwinds.

In H1, banks shifted into government investments (42.3% of assets) while deposits rose to GH¢280.1 billion. For treasurers, that has meant competitive money-market pricing; as policy rates fall, yields will drift lower, nudging corporates back toward inventory build, receivables financing, and selective expansion. Sector-wise, construction (cement sales up 8.5% YoY in May) and trade (retail sales up 38.6% YoY in May) already showed momentum.

But discipline matters.

The bank-profit surge was helped by other income (?52.2%) and lower impairments; if margins compress with falling rates, lenders will lean harder on volume, fee income, and cost control. Corporates with clean financials will price better and access faster; those with weak cash flows will face tighter covenants even in an easing cycle.

Households: Transmission, Relief, and Inclusion

Transmission of rate cuts.

Households should see a gradual decline in loan rates on personal, SME-owner, and mortgage products as policy cuts pass through base rates and reference benchmarks, supporting big-ticket purchases and easing debt service into 2026. The BoG survey picked rising demand for mortgages and consumer credit in Q2, signaling appetite if pricing improves.

Savings math is changing.

As interbank and bill yields drift down, fixed-income returns will cool from H1 highs. Households will need to rebalance emergency funds vs. return-seeking products and watch fee drag. Financial literacy around rate resets, refinancing options, and inflation-adjusted returns will be decisive for preserving real wealth as inflation trends toward target. (Inflation has continued to ease through Q3, supporting lower nominal rates.)

Consumer protection & credit quality.

With banks chasing volume, the policy priority is responsible lending: clear disclosures, stress-tested affordability, and early-warning systems to avoid a post-easing spike in delinquencies that could erase household gains. BoG’s emphasis on NPL reduction and underwriting standards is therefore critical.

Sustainability Lens: Building a Safer, Greener Intermediation Cycle

Capital and buffers.

Stronger profits, recapitalization progress, and improving solvency/liquidity expand the system’s ability to finance long-duration, productivity-raising projects, including energy transition and resilient infrastructure, without sacrificing stability metrics. The BoG’s stress tests and resilience analysis underscore that profit retention and adequate liquidity have improved shock absorption.

Crowding-in private investment.

As sovereign borrowing costs decline and macro stability improves, banks can allocate more balance-sheet room to private-sector credit, supporting green buildings, efficient transport fleets, and climate-smart agriculture. The 2025 fiscal review outlines policy measures (fx stability, consolidation) that, if sustained, can crowd-in private capital at scale.

Key Numbers that Move Finance (H1-2025)

• PAT: GH¢7.2 bn ( 32.6% YoY). PBT: GH¢10.8 bn ( 32.2%).
• Net interest income: GH¢14.2 bn ( 20.2%). Other income: 52.2%.
• Operating income: 24.4%.
• Deposits: GH¢280.1 bn; Investments: 42.3% of assets; Impairments: –14.8%.
• Policy rate: 25.0% (Jul 30) and5% (Sept 17).

Conclusion

Ghana’s banking sector has turned a decisive profitability corner just as monetary policy pivots to support growth. The numbers that move finance, profits, deposits, asset mix, and the policy rate are aligned for a more affordable cost of capital, stronger public-finance execution, and measured relief for households.

The opportunity now is to convert profits into productive lending while keeping a tight grip on underwriting and NPLs. If government sustains consolidation and disinflation, and banks channel balance-sheet strength into real-economy credit, Ghana can carry this H1 surge into inclusive, sustainable growth through 2026.

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