Banks’ pre-tax profit jumps 40% to GH¢23bn

In 2025, Ghana's banking sector experienced a significant boost in pre-tax profit, with profit before tax (PBT) surging by 39.8 percent to reach GH¢23 billion. This marked an increase from GH¢16.5 billion in the preceding year. The PwC Ghana Banking Survey 2026 identified three primary factors contributing to this impressive growth: higher investment income, stronger net trading income, and a sharp decline in net impairment losses.

Investment income played a pivotal role, rising by GH¢7.8 billion, or 45.2 percent, in 2025. Despite a decrease in interest rates on Treasury bills, the volume of investment securities held by banks surged by 57.6 percent. This was facilitated by a directive from the Bank of Ghana requiring banks to maintain reserves in the same currency as the underlying deposits, enhancing liquidity and enabling greater deployment into securities.

Net trading income also posted substantial growth, increasing by GH¢2.4 billion, or 43.5 percent, driven largely by foreign exchange translation and transaction gains. This growth was supported by banks maintaining net short foreign currency positions as per Bank of Ghana policies, alongside the strengthening of the Ghana cedi. However, the impact of these gains varied among individual banks based on their foreign currency exposures and trading strategies.

A key driver behind the improved profitability was a remarkable 75.9 percent decline in net impairment losses, dropping from GH¢3.5 billion in 2024 to just GH¢841 million in 2025. This reduction was a result of an industry-wide cleanup of loan portfolios following a Bank of Ghana directive. The decline was further bolstered by adequate collateralization, full provisioning of non-performing loans, and positive impairment reversals and recoveries.

Despite the enhanced profitability, a notable concern emerged with a 26.5 percent rise in operating expenses, from GH¢16 billion in 2024 to GH¢20.2 billion in 2025. However, the sector's ability to absorb higher costs was largely due to the substantial growth in income, which resulted in a more advantageous PBT margin, improving from 46.3 percent to 52.2 percent.

The survey cautioned that sustaining this level of profitability might prove challenging as the banking sector adapts to a lower-yield environment. Banks would need to focus on preserving asset quality, maintaining cost discipline, diversifying income streams, and adapting their business models to evolving market conditions. Institutions adept at combining revenue growth with prudent risk management and operational efficiency would be better positioned to maintain their performance in the coming years.