Ghana’s banking sector is entering what experts describe as one of its most significant turning points in recent years, as falling interest rates threaten to reshape the industry’s traditional profit model.
This warning comes from PricewaterhouseCoopers (PwC) Ghana, which has unveiled the findings of its 2026 Ghana Banking Survey under the theme, “When Rates Recede: Sustaining and Returning Value in Ghana’s Banking Sector Through a Falling Interest Rate Cycle.”
The report paints a picture of a banking industry that is moving into unfamiliar territory. While lower interest rates are expected to boost borrowing, encourage private sector investment and strengthen economic growth, they are also expected to squeeze the interest income that has long been the backbone of banks’ earnings.
According to PwC, the coming months will test the resilience of financial institutions like never before, forcing them to rethink how they generate revenue and create long-term value.
Banks Face New Reality
The findings were presented during PwC’s 2026 Ghana Banking Forum, which brought together chief executive officers, chief financial officers, representatives of the Ghana Association of Banks (GAB), the Bank of Ghana (BoG), and other key players within the financial services industry.
Speaking at the forum, Country Senior Partner at PwC Ghana, Vish Ashiagbor, described Ghana’s improving macroeconomic environment as encouraging but warned that it also introduces fresh challenges for commercial banks.
“The macroeconomic stabilization we witnessed in 2025 is a welcome relief, signaling a strong recovery path. However, for commercial banks, this success brings a unique challenge. We are transitioning from a high-interest-rate environment that cushioned margins to an easing cycle that will test corporate resilience. This next phase must be driven by deep, deliberate banking transformation.”
Vish Ashiagbor
His remarks reflect growing concerns that banks can no longer depend on high lending rates to deliver strong financial results.
Profit Margins Under Pressure
PwC explained that the Bank of Ghana’s monetary policy easing, introduced in response to declining inflation, has significantly reduced borrowing costs across the economy.
According to the survey, the Ghana Reference Rate (GRR) has declined by more than 1,400 basis points, while the industry’s average lending rate has fallen by about 600 basis points.
Although cheaper loans are expected to stimulate borrowing and support business expansion, they also reduce the interest income that banks traditionally earn from lending activities.
The report reveals that Ghanaian banks remain heavily dependent on interest income, which accounts for nearly 70 percent of the industry’s total revenue. As lending rates continue to decline, that dependence is expected to place increasing pressure on profitability.
Government Securities No Longer a Safe Bet
The survey also highlights a dramatic shift in how banks generate interest income.
In 2015, loans contributed 64 percent of net interest income, while investment securities accounted for just 33 percent.
By 2025, the trend had completely reversed. Government securities generated 55 percent of net interest income, while loans contributed only 38 percent.
PwC warns that this growing dependence on government securities leaves banks vulnerable as Treasury bill yields continue to fall alongside interest rates.
The report also points to ongoing credit quality concerns despite the improving economy.
Bank lending remains concentrated in the services sector, which accounted for 22.2 percent of total credit in 2025, followed by commerce and finance at 19 percent. These sectors also recorded the highest levels of impaired assets and non-performing loans, highlighting that credit risks remain a major concern.
Digital Banking Becomes the New Growth Engine
PwC believes the future of Ghana’s banking industry lies beyond traditional lending.
Instead, the report urges banks to embrace digital ecosystems and build sustainable sources of fee-based income through innovation and technology.
Financial Services Leader at PwC Ghana, Kingsford Arthur, stressed that the era of relying mainly on interest income is rapidly fading.
“Historically, banks relied on interest margins to drive growth, but that model faces structural limits as rates fall. If we remove interest income from your income statement today, what remains, and is it strong enough to build the future of your bank? The future belongs to institutions that pivot away from balance sheet dependency towards transaction and ecosystem banking. By scaling digital platforms, trade finance, API-enabled embedded partnerships and advisory services, banks can unlock capital-light revenue streams.”
Kingsford Arthur
PwC recommends that banks expand payment and transaction services, strengthen SME ecosystems through digital platforms, increase trade finance and foreign exchange services, develop API-driven partnerships with fintechs and retailers, and grow advisory services covering debt restructuring, capital raising and public-private partnerships.
These strategies, the report argues, will help reduce dependence on interest income while creating more resilient and diversified business models.
Future Winners Will Be Those That Reinvent
Looking ahead, PwC expects Ghana’s macroeconomic recovery to remain largely stable over the medium term.
The report projects inflation to remain within the Bank of Ghana’s medium-term target range of 6 ± 2 percent. It also forecasts that the cedi will depreciate gradually to between GH¢11.50 and GH¢13.00 against the US dollar by the end of the year.
Monetary policy easing is also expected to continue, with the policy rate projected to decline to between 12 percent and 13 percent by early 2027.
While banks are likely to experience pressure on profit margins over the next six to twelve months, PwC believes institutions that successfully expand fee-based and transaction-driven businesses will outperform competitors in the years ahead.
Mr. Ashiagbor concluded that future success will depend on innovation rather than interest rates. “The winners in the medium term will not be those waiting for interest rates to bounce back, but those who redesign their business models around value-added services, transaction volumes and customer-centric platforms,” he said.
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