The Governor of the Bank of Ghana (BoG),Johnson Asiam has raised concerns about the structure of earnings within Ghana’s banking sector, cautioning that heavy reliance on interest income could pose risks as economic conditions evolve.
Speaking at the Post-Monetary Policy Committee (MPC) engagement with heads of banks at Bank Square in Accra on Wednesday, February 18, 2026, Dr. Asiama revealed that about 68 percent of the industry’s profitability is driven by net interest income. This, he explained, reflects a narrow earnings base that leaves banks highly exposed to changes in interest rate cycles and sovereign risk conditions.
“There is nothing inherently problematic about net interest income,” the Governor noted. “However, a high dependence on it increases sensitivity to interest rate cycles and sovereign exposure dynamics.”
According to him, many banks continue to hold significant portions of their assets in sovereign and central bank instruments, resulting in elevated exposure to government-related risks. While this strategy has supported profitability in recent years, he warned that a gradual shift toward a normalising interest rate environment is likely to compress margins, making it more difficult for banks to sustain earnings through interest income alone.
Dr. Asiama therefore urged banks to diversify their revenue streams by strengthening transactional banking, trade finance services, payments, treasury operations and other fee-based activities that are less dependent on balance sheet expansion.
Beyond profitability concerns, the Governor acknowledged improvements in asset quality across the sector, noting that non-performing loans (NPLs) have declined. However, he cautioned that NPL levels remain above benchmark thresholds and stressed the need for continued vigilance.
“As credit expansion resumes, underwriting discipline and sectoral risk assessment will be critical,” he said, adding that financial system stability must translate into meaningful support for the real economy.
He encouraged banks to channel more credit to agriculture, manufacturing, small and medium-sized enterprises (SMEs), and other value-adding sectors, while avoiding a return to asset quality pressures.
The remarks were based on findings from a one-year thematic review of banks’ business models conducted by the central bank. The assessment examined funding structures, asset allocation patterns, earnings composition and governance effectiveness under both baseline and stress scenarios.
While the review confirmed that the banking sector remains viable and profitable, it also highlighted structural vulnerabilities that require attention as Ghana enters a more stable macroeconomic phase.
“The sector is stable,” Dr. Asiama concluded, “but stability must now evolve into productive intermediation that supports economic transformation.”
