The banking industry’s profit after tax fell by 1.3% year-on-year to GH¢7.1 billion at the end of June 2026, compared with GH¢7.2 billion recorded during the same period in 2025.

The decline represents a sharp reversal from the 32.6% growth in profit after tax recorded in June 2025, according to the Bank of Ghana’s July 2026 Monetary Policy Report.

Profit before tax (PBT) also contracted by 1.5% year-on-year in June 2026, compared with a 32.2% growth recorded during the corresponding period in 2025.

The central bank attributed the moderation in profitability largely to slower growth in major income lines, particularly net interest income.

Slower income growth

Apart from fees and commissions, which recorded a marginally higher growth rate, all major income lines expanded at a slower pace in June 2026 compared with the same period a year earlier.

Fees and commissions income grew by 18.2%, up slightly from the 17.8% recorded in June 2025.

However, growth in net interest income contracted by 3.1% in June 2026, compared with a 20.2% growth a year earlier.

The Bank of Ghana attributed the development to a slowdown in interest income growth, largely reflecting the prevailing low-interest-rate environment during the review period.

Growth in other income also slowed compared with the corresponding period in 2025.

Cost pressures

The growth in the banking industry’s cost components also moderated during the period under review.

Operating expenses increased by 6.0% in June 2026, down significantly from the 21.4% growth recorded a year earlier.

According to the Bank of Ghana, the moderation was driven by slower growth in staff costs, while non-staff-related expenses contracted during the period.

However, provisions for depreciation, bad debts and impairment losses on financial assets increased substantially.

These provisions grew by 38.2% in June 2026, compared with a 14.8% contraction recorded in June 2025.

Return on equity and assets decline

The slowdown in earnings also affected key profitability indicators in the banking sector.

Return on Equity (ROE) declined to 22.9% in June 2026 from 32.2% in June 2025.

Similarly, Return on Assets (ROA) fell to 4.4%, compared with 5.6% over the same period.

Interest spread narrows

The interest spread for the banking industry also narrowed significantly, falling from 6.0% in June 2025 to 4.4% in June 2026.

The Bank of Ghana said the decline in the spread was associated with changes in interest payable, which fell from 2.8% to 1.7% over the period.

Gross yields also declined to 6.1% in June 2026 from 8.9% a year earlier.

The ratio of gross income to total assets, or asset utilisation, similarly fell from 7.4% to 5.4%.

Despite these declines, the profitability ratio recorded a marginal improvement, increasing from 25.3% in June 2025 to 25.9% in June 2026.