The banking industry’s profit-after-tax increased by 25.5% to GH¢5.4 billion in June 2024, the Monetary Policy Report of the Bank of Ghana has revealed.

This is compared with the 51.4% growth recorded in June 2023.

Profit-before-tax also rose by 22.8% to GH¢8.1 billion.

The lower growth in profit during the first half of this year was because of lower increases in interest income and other income lines in 2024, relative to the same period in 2023.

Generally, all income lines increased

Interest Income

Net interest income grew by 19.4% to GH¢11.8 billion, lower than the corresponding period’s growth of 41.4% in 2023.

In year-on-year terms, interest income increased to GH¢18.0 billion from GH¢15.1 billion, representing a growth of 19.1% relative to 44.3% in June 2023.

The lower growth in interest income was explained by the relatively lower rates on money market instruments this year compared to the first half of 2023, as well as a decline in lending rates. Interest expenses also rose to GH¢6.2 billion in June 2024, representing a lower growth rate of 18.6% compared to the 50.0% recorded in June 2023.

Fees and Commissions

Net fees and commissions recorded a slower growth of 16.8% in June 2024, from 30.6% a year ago, while other income recorded a sharp contraction of 16.2 percent to GH¢2.4 billion in June 2024, from GH¢2.8 billion in June 2023.

These developments in the different income lines culminated into a sharp increase in industry’s operating income to GH¢16.8 billion in June 2024, from GH¢14.9 billion in June 2023.

Similarly, gross income increased to GH¢23.0 billion in June 2024, from GH¢20.1 billion in June 2023. The cost lines recorded similar increases in June 2024, but at lower growth rates compared to the same period in 2023.

The industry’s operating expenses grew by 15.5% in June 2024, compared to 44.9% in June 2023, on the back of slower growth in staff costs and other operating (administrative) expenses.

Impairment losses on financial assets, as well as provisions for bad debt and depreciation, contracted by 39.5 percent in June 2024, compared to 32.7 percent increase in June 2023.