- ADB swings to profit as recapitalisation and loan recoveries strengthen balance sheet
Agricultural Development Bank (ADB) returned to profitability in 2025, posting a sharp rebound in earnings as recapitalisation efforts, loan recoveries and improved operating income strengthened its balance sheet after years of stress. The bank reported a profit after tax of GH¢367.3m, up from just GH¢35.1m a year earlier, marking a decisive turnaround driven largely by a doubling of net interest income and a significant reduction in impairment charges.
Net interest income rose to GH¢1.37bn from GH¢723m, supported by higher interest income and lower funding costs, while total operating income climbed to GH¢1.75bn, reflecting stronger core banking activity and improved fee generation. The earnings rebound comes alongside a marked strengthening of the bank’s capital position. Total equity nearly doubled to GH¢2.48bn, driven by a GH¢850m deposit for shares and retained earnings, reversing years of accumulated losses.
This capital injection, combined with loan recoveries estimated at over GH¢381m, helped push the bank’s capital adequacy ratio to 27.17%, a sharp recovery from negative territory just two years earlier. ADB’s balance sheet expanded significantly, with total assets rising to GH¢17.9bn from GH¢14.6bn, driven largely by growth in cash reserves and investment securities.
However, the composition of that growth points to a more cautious risk posture. Loans and advances declined to GH¢2.01bn from GH¢2.57bn, suggesting a continued retrenchment in credit exposure even as liquidity levels improved. Cash and bank balances surged to GH¢9.9bn, reinforcing a shift toward liquidity preservation and balance sheet stability. Customer deposits also grew to GH¢13.2bn, indicating renewed depositor confidence and improved funding stability.
ADB recorded lower impairment losses on loans, which fell to GH¢231.8m from GH¢302.9m, contributing significantly to the bottom-line recovery. Yet asset quality concerns persist. The bank’s non-performing loans ratio remains elevated at over 70%, underscoring the structural challenges within its loan book despite ongoing recoveries.
At the same time, operating costs remain substantial, with personnel expenses and other operating costs together exceeding GH¢838m, reflecting the ongoing cost burden of maintaining nationwide banking operations. Liquidity metrics also strengthened, with the bank’s liquid ratio rising to 137.3%, well above regulatory thresholds, supported by strong deposit inflows and investment repositioning.
Cash flows from operations remained robust at GH¢2.86bn, although lower than the previous year, reflecting stabilising but still active balance sheet adjustments. Importantly, the bank reported no statutory liquidity breaches during the period, signalling improved regulatory compliance and operational discipline.
ADB’s 2025 performance reflects a bank transitioning from stabilisation to early recovery, with profitability, capital buffers and liquidity all improving materially.
However, the decline in lending activity highlights a key strategic tension: whether the bank can pivot from balance sheet repair to sustainable credit expansion without reintroducing asset quality risks.
For investors and policymakers, the next phase will be defined less by recapitalisation and more by execution particularly the bank’s ability to rebuild a healthy loan portfolio, support Ghana’s agricultural sector mandate, and translate its strengthened balance sheet into durable earnings growth.
