The Bank of Ghana (BoG), in its July Monetary Policy report, revealed that despite banks achieving higher profit-before-tax (PBT) and profit-after-tax (PAT) in June 2024 compared to the same period last year, the growth rate of these profits has slowed. Profit growth moderated to 25.5% in June 2024, down from 51.4% in the same period in 2023.
According to the BoG, while all income lines in the banking sector saw increases, they did so at a much slower pace than last year. For instance, net interest income grew by 19.4%, reaching GH¢11.8 billion, a significant drop from the 41.4% growth recorded in June 2023. Similarly, interest income rose to GH¢18.0 billion, reflecting a 19.1% increase compared to a much higher 44.3% growth last year.
The BoG attributed the slowed growth in interest income to lower rates on money market instruments and a general decline in lending rates during the first half of 2024, when compared to 2023. In addition, interest expenses also grew, reaching GH¢6.2 billion—an 18.6% rise, which is notably lower than the 50% increase recorded in June 2023.
In a broader context, the BoG’s January 2024 macroeconomic and financial data report highlighted the state of the Ghanaian economy in several key sectors, including interest rates, price developments, and external sector performance. This report provided insights into the overall fiscal operations, capital market performance, and the developing payment system in Ghana.
The banking sector’s performance in 2024 and 2023 has been shaped by several challenges, including the lingering effects of COVID-19, the Russia-Ukraine war, and the government’s domestic debt exchange programme (DDEP). The DDEP, which required significant cooperation from banks and financial institutions, posed severe financial consequences but was necessary for navigating Ghana’s economy from near-recession to recovery and sustainable growth.
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