- Ecobank Ghana Expands Loan Book by 34.71%, but Revenue and Earnings Decline
Ecobank Ghana Plc recorded a modest decline in profitability during the first nine months of 2026 as weaker interest income, rising personnel costs and a higher tax charge offset improvements in fee income, loan impairment expenses and other operating costs.
The results present a bank that is expanding credit aggressively and strengthening its capital position but experiencing pressure on the income generated from its larger balance sheet.
At the group level, profit after tax declined by 4.33% from GH¢1.42 billion in the first nine months of 2025 to GH¢1.35 billion in the corresponding period of 2026.
The bank’s standalone profit also fell by 4.70%, from GH¢1.39 billion to GH¢1.33 billion. Basic earnings per share declined from GH¢4.39 to GH¢4.20 at group level and from GH¢4.31 to GH¢4.11 for the bank.
The decline is not severe enough to suggest an immediate deterioration in Ecobank Ghana’s financial strength. The institution remains profitable, liquid and adequately capitalised. However, the results expose several areas requiring attention, particularly the decline in core interest income, the high level of non-performing loans, rapid credit expansion, increasing operating costs and rising contingent exposures.
The most significant concern is the weakening of the bank’s principal earnings engine.
Group interest revenue declined by 9.03% from GH¢3.58 billion to GH¢3.26 billion. At the standalone bank level, interest revenue fell by 8.35% from GH¢3.40 billion to GH¢3.12 billion.
Interest expense also declined, falling by 10.41% at group level to GH¢912 million. However, that reduction was insufficient to prevent net interest income from decreasing.
Group net interest income fell by 8.48% from GH¢2.56 billion to GH¢2.34 billion, while the bank’s net interest income declined by 8.80% from GH¢2.49 billion to GH¢2.27 billion.
This contraction occurred even as Ecobank Ghana significantly expanded lending.
Group loans and advances to customers increased by 34.71% from GH¢12.12 billion to GH¢16.32 billion. The bank’s standalone loan portfolio similarly expanded by 34.37% from GH¢12.03 billion to GH¢16.16 billion.
A larger loan book would ordinarily be expected to generate higher interest income, assuming yields and asset quality remain stable. The fact that interest revenue declined despite the expansion suggests that the bank may be earning lower yields on its assets, experiencing changes in the composition of its loan and investment portfolios, or facing the effect of monetary and market-rate adjustments.
It may also reflect the timing of loan disbursements. If a substantial proportion of the new loans was advanced later in the period, the full interest benefit would not yet have appeared in the nine-month results. Nonetheless, the divergence between loan growth and interest-income performance deserves scrutiny.
Ecobank’s customer loan-to-deposit ratio increased from approximately 35.08% in September 2025 to 42.89% in September 2026 at group level. The ratio remains moderate and indicates that the bank retains substantial funding capacity. But its upward movement shows that more of the deposit base is being committed to lending.
The speed of loan growth raises a second issue: whether credit-risk controls are keeping pace with business expansion.
Ecobank Ghana’s non-performing loan ratio improved from 20.96% to 14.99%. This decline of 5.97 percentage points is significant and suggests progress in recoveries, restructuring, write-offs or growth in performing loans.
However, a 14.99% NPL ratio remains elevated. It means that approximately GH¢15 out of every GH¢100 in the relevant loan portfolio is classified as non-performing under the regulatory measure.
The improvement must also be considered alongside the 34.71% increase in gross loans. When a loan portfolio expands rapidly, the NPL ratio can fall because the denominator grows, even if the absolute stock of troubled loans does not decline at the same pace.
The financial statements do not disclose the absolute amount of non-performing loans or the proportion covered by provisions. It is therefore not possible to determine from the summary accounts alone how much of the improvement came from actual recoveries and how much resulted from credit expansion.
Net impairment charges on financial assets fell by 22.80% from GH¢221.21 million to GH¢170.77 million. At the bank level, the charge declined by 24.11% from GH¢219.99 million to GH¢166.96 million.
The reduction supported profitability, but investors should watch whether impairment costs remain contained as the newer loans mature. Credit problems often emerge after a delay, particularly when a bank is growing its loan portfolio faster than deposits and the broader economy.
Ecobank reported a credit-risk reserve of GH¢393.86 million at group level, up from GH¢107.81 million in September 2025. For the bank, the reserve increased from GH¢107.81 million to GH¢395.47 million.
The substantial rise provides an additional regulatory buffer, but it also indicates that expected credit losses calculated under accounting standards remain below the level of provisions required under the Bank of Ghana’s prudential rules. The difference is transferred to a non-distributable credit-risk reserve within equity.
Outside interest income, the results were mixed.
Fee and commission income rose by 11.85% from GH¢550.15 million to GH¢615.36 million. After accounting for related expenses, net fee and commission income increased by 13.87% to GH¢507.82 million.
This growth provides welcome diversification from lending and investment income. It suggests stronger transaction volumes or increased earnings from payments, trade services, account management and other banking activities.
Net trading income, however, declined by 3.60% from GH¢635.56 million to GH¢612.68 million, while other operating income fell sharply by 57.04% from GH¢109.22 million to GH¢46.92 million.
As a result, group operating income declined by 6.41% from GH¢3.75 billion to GH¢3.51 billion. The standalone bank recorded a similar decline of 6.78% to GH¢3.43 billion.
The fall in operating income was partly offset by lower other operating expenses, which declined by 28.98% from GH¢780.65 million to GH¢554.45 million. At the bank level, these expenses fell by 29.94% to GH¢536.27 million.
This reduction represents meaningful cost discipline, but it was accompanied by increases elsewhere.
Personnel expenses rose by 11.13% from GH¢558.35 million to GH¢620.51 million, while depreciation and amortisation increased by 10.47% to GH¢73.17 million.
The rise in staff costs while operating income declined places pressure on operating efficiency. Personnel expenses consumed 17.67% of operating income in 2026, compared with 14.88% in the corresponding period of 2025.
Finance costs on lease liabilities declined from GH¢16.24 million to GH¢8.56 million, providing some relief.
Overall, profit before tax declined by 1.19% from GH¢2.11 billion to GH¢2.08 billion. The relatively small fall in pre-tax profit, compared with the 6.41% decline in operating income, shows that reductions in impairment and other operating expenses protected earnings.
Taxation then placed additional pressure on the bottom line.
Group income tax expense increased by 5.22% from GH¢692.71 million to GH¢728.85 million, despite the reduction in pre-tax profit. The effective tax rate consequently increased from approximately 32.85% to 34.97%.
The combined effect of lower pre-tax profit and a higher effective tax burden produced the 4.33% decline in profit after tax.
Another pressure point is the movement in liquidity holdings.
Group cash and cash equivalents on the statement of financial position declined by 13.35% from GH¢19.82 billion to GH¢17.17 billion. At the bank level, cash and cash equivalents fell by 13.49% to GH¢17.12 billion.
The decline is not currently a regulatory liquidity concern. Ecobank’s disclosed liquid ratio improved from 63.02% to 64.50%, and the bank reported no default in statutory liquidity requirements.
The cash reduction should instead be viewed alongside the significant increases in loans and non-trading assets. Non-trading assets at group level rose by 70.72% from GH¢10.28 billion to GH¢17.56 billion. The bank’s non-trading assets increased by 65.82% to GH¢15.64 billion.
This indicates that liquidity was being redeployed into loans and longer-term investment assets. That can improve future earnings if the assets generate appropriate returns, but it also increases sensitivity to credit risk, interest-rate movements and market valuation changes.
The cash-flow statement shows that loans and advances absorbed GH¢3.55 billion during the period, more than double the GH¢1.60 billion absorbed in the comparable period of 2025.
Purchases of investment securities resulted in a further net cash outflow of GH¢2.58 billion, compared with a small net inflow of GH¢39.48 million in 2025.
These outflows were financed largely by strong deposit mobilisation. Customer deposits contributed GH¢6.52 billion to operating cash flow, compared with GH¢2.08 billion a year earlier. Deposits from banks contributed another GH¢2.18 billion.
On the balance sheet, customer deposits grew by 10.18% to GH¢38.06 billion, while deposits from banks rose by 12.81% to GH¢6.90 billion.
The faster growth in loans than customer deposits is not yet alarming because Ecobank retains a substantial liquid asset base. However, the trend should be monitored. Sustained credit growth above deposit growth could eventually increase reliance on institutional funding or require the bank to compete more aggressively for deposits.
The bank’s funding position also includes a notable concentration in deposits from other banks, which represented approximately 15.35% of total bank and customer deposits. Institutional deposits can be less stable than dispersed retail balances because large depositors may move funds quickly in response to market conditions.
Borrowings declined by 42.30% from GH¢487.56 million to GH¢281.32 million, while lease liabilities fell by 62.01% to GH¢37.98 million. This reduced direct wholesale borrowing and leasing obligations.
Ecobank’s capital position strengthened considerably.
Total group equity rose by 21.54% from GH¢6.72 billion to GH¢8.16 billion. The capital adequacy ratio improved from 15.18% to 18.19%, while the Common Equity Tier 1 ratio increased from 12.18% to 16.19%.
The leverage ratio also improved from 6.93% to 8.53%. These ratios indicate that Ecobank has stronger loss-absorbing capacity than it did a year earlier.
The improved capital position is particularly important given the expansion in loans and other financial assets. However, the bank paid dividends of GH¢390.29 million during the period, compared with GH¢109.67 million in 2025. That represents an increase of 255.88%.
The dividend was equivalent to approximately 29.45% of the bank’s standalone profit. The payout remains supportable, but capital allocation will need to balance shareholder distributions against the demands of continued loan growth and credit-risk protection.
Off-balance-sheet exposures also increased.
Contingent liabilities rose by 25.49% from GH¢4.73 billion to GH¢5.94 billion. Documentary letters of credit nearly doubled, increasing by 90.58% from GH¢1.51 billion to GH¢2.87 billion.
Guarantees and indemnities declined by 4.62% to GH¢648.99 million, while loan commitments fell by 5.05% to GH¢2.41 billion.
The increase in letters of credit may reflect stronger trade-finance activity and could support future fee income. However, contingent exposures can become actual obligations if customers fail to perform. Their growth therefore adds another dimension to the bank’s credit and liquidity risks.
Ecobank also disclosed GH¢3.35 million in “other regulatory sanctions” for 2026, compared with none in the corresponding period of 2025.
The summary financial statements do not explain the nature of the sanctions. While the amount is immaterial relative to Ecobank’s earnings and capital, the existence of a new regulatory penalty is a governance and compliance issue requiring explanation.
One apparent reporting inconsistency also deserves reconciliation. The standalone income statement reports bank profit after tax of GH¢1.33 billion, but the bank’s cash-flow statement begins with profit after tax of GH¢1.30 billion. The difference is approximately GH¢27.55 million.
This may be a presentation error or the result of an adjustment not explained in the summary statements. Whatever the reason, the two figures should ordinarily reconcile or be supported by a clear note.
Ecobank Ghana remains financially strong. Its capital adequacy, liquidity, leverage and operating cash generation all improved, while its NPL ratio and impairment charge declined.
But the quality of the period’s performance is mixed. Revenue contracted, interest income fell despite substantial loan growth, profit declined, staff costs increased, the NPL ratio remained high, contingent liabilities expanded and a regulatory sanction appeared for the first time in the comparative disclosure.
The central question is whether the rapid expansion of loans and investment securities will produce stronger interest income without creating a later increase in defaults and impairment charges.
Ecobank has the capital and liquidity to pursue growth. The challenge is ensuring that the new assets generate adequate risk-adjusted returns. In the next reporting periods, investors should watch the direction of net interest income, absolute non-performing loans, impairment coverage, deposit growth, funding concentration and the performance of the rapidly expanded credit portfolio.
