Bank profit growth slows to about 6% in January, February due to COVID-19 – BoG Report

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A slowdown in the growth of gross loans and advances given out by banks in the first two months of 2021 as a result of pandemic-induced weaknesses has had a negative impact on such financial institutions’ interest income.


This has contributed to a general slowdown in the growth of bank profits in January and February 2021.

According to the Bank of Ghana’s Banking Sector Development report for March, the country’s 23 banks reported a modest profit performance for the first two months of 2021 compared to the same period last year.

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It attributed the problem to lower revenue growth and higher loan provisions.

Profit after tax growth slowed to 5.9 percent in January and February 2021, down from 38.8 percent in the same period in 2020.

Due to the relatively low growth in credits, the growth in bank income as a result of interest paid on loans fell to 9.5 percent in February 2021 from 22.0 percent in February 2020.

Banks’ net fees and commissions increased by 13.7 percent in the country, compared to 18.4 percent the previous year.

Slower growth in credits, trade-financing, and other off-balance-sheet transactions contributed to a decrease in fee and commission growth during the review period.

Similarly, net interest income growth fell from 25.9 percent in February 2020 to 10.9 percent in February 2021, despite a drop in interest expense growth due to the contraction in borrowings.


The structure of the balance sheet was reflected in the composition of bank income in February 2021.


Interest income from investments remained the largest source of bank income, increasing to 51.1 percent in February 2021 from 42.5 percent the previous year, in line with the increase in banks’ investment holdings.

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Interest income from loans was the second-largest source of income for banks, but its share fell to 31.1 percent from 38.7 percent, reflecting the slowing of credit growth.

However, the share of fees and commissions increased marginally to 12.3 percent from 11.7 percent over the same period, while the share of other income sources decreased to 5.5 percent from 7.2 percent..

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