- First Atlantic Bank’s Assets Surge 39.36%, but Profit Growth Slows to 3.37%
First Atlantic Bank PLC closed the first nine months of 2026 with a significantly larger balance sheet, stronger income generation and improving liquidity, but its unaudited financial statements also reveal areas demanding closer attention: subdued profit growth, rising operating costs, an elevated non-performing loan ratio, negative operating cash flow and a decline in earnings per share.
Group profit before tax increased by 3.37% to GH¢383.81 million from GH¢371.30 million in September 2025. Profit after tax rose more slowly, advancing 2.33% from GH¢252.48 million to GH¢258.36 million.
The modest growth in profit contrasts sharply with the expansion recorded across the bank’s balance sheet and core revenue lines. Total assets increased by 39.36% to GH¢21.82 billion, while customer deposits climbed 37.61% to GH¢19.04 billion.
That contrast is central to understanding the results. First Atlantic Bank is growing rapidly, but the additional assets and deposits have not yet translated into profit growth of comparable scale.
The bank’s interest income increased by only 3.17% to GH¢772.64 million, despite loans and investment securities growing substantially. Management attributed this restrained increase to lower market interest rates and pressure on lending yields.
The stronger development was on the funding side. Interest expense declined by 32.71% to GH¢246.05 million from GH¢365.64 million. This helped net interest income rise by 37.40% to GH¢526.59 million.
The improvement suggests that falling funding costs protected the bank from the pressure lower interest rates placed on asset yields. However, relying heavily on reduced funding costs has limits. If interest expenses stabilise while lending and investment yields continue declining, future expansion in net interest income could become more difficult.
Fee and commission income provided further support. Gross fee and commission income increased by 62.91% to GH¢354.26 million, reflecting higher transaction volumes and customer activity.
The cost of generating that income, however, also rose sharply. Fee and commission expenses increased by 74.98% to GH¢154.20 million. Consequently, net fee and commission income grew by a lower 54.69% to GH¢200.07 million.
The growth remains impressive and demonstrates increasing revenue diversification. Yet the faster expansion in related expenses indicates that management must protect the economics of the bank’s transaction businesses as volumes grow.
Net trading income was one weak point, declining by 14.64% from GH¢113.39 million to GH¢96.79 million. Other operating income also fell by 15.04% to GH¢2.97 million.
These reductions were more than offset by stronger net interest and fee income, lifting operating income by 31.29% to GH¢826.42 million. This represents a broad improvement in core revenue generation, but operating costs absorbed a meaningful portion of the gain.
Personnel expenses rose by 3.50% to GH¢144.52 million, while depreciation and amortisation increased by 28.96% to GH¢53.29 million. Other operating expenses climbed more sharply, rising by 43.01% to GH¢243.92 million.
The increase in depreciation and other expenses reflects investment in technology, employees, infrastructure and expansion, including the commencement of banking operations in Liberia in August 2026. Such expenditure may support future growth, but it places an immediate burden on profitability.
Operating expenses, excluding finance costs on lease liabilities, rose by about 25.67%. This remained below the 31.29% increase in operating income, allowing the reported cost-to-income ratio to improve to 53.50% from 56.70%.
The improvement is positive, but a cost-to-income ratio above 50.00% means more than half of operating income is still consumed by the cost base. Management’s challenge is to ensure its investments generate enough recurring income to produce further efficiency gains.
The impairment line also requires careful interpretation. The bank reported a net impairment reversal of GH¢3.70 million, compared with a much larger reversal of GH¢98.70 million in the corresponding period of 2025.
This base effect explains why strong operating-income growth produced only a modest increase in profit before tax. The previous year’s earnings received an unusually large boost from impairment reversals, while the contribution in 2026 was substantially smaller.
Stripping out those reversals, underlying operating profit before impairment improved considerably. This indicates that core business performance was stronger than the headline 3.37% growth in profit before tax suggests.
At the same time, investors should not treat impairment reversals as a dependable source of future earnings. Sustainable profitability must come primarily from net interest income, fees and disciplined expense management.
Tax and sector-specific levies also reduced the amount reaching shareholders. Income tax, the Growth and Sustainability Levy and the Financial Sector Recovery Levy totalled GH¢125.45 million, compared with GH¢118.82 million in the previous period.
Although group profit attributable to shareholders increased, earnings per share declined from GH¢0.72 to GH¢0.68. This is important because shareholders ultimately judge performance by the earnings generated for each share they own.
The decline appears connected to an expanded share base following capital changes, including the previous bonus-share issue. It demonstrates that growth in absolute profit does not automatically translate into improved shareholder returns when the number of shares increases.
The balance sheet presents both strength and questions about asset deployment. Loans and advances grew by 66.65% to GH¢2.53 billion, demonstrating a significantly stronger push into private-sector credit.
Investment securities increased by 43.87% to GH¢5.15 billion, while cash and balances with banks almost doubled, rising by 94.57% to GH¢6.45 billion.
Despite the rapid loan growth, loans represented only about 11.58% of total assets. The loan-to-deposit ratio stood at approximately 13.28%, up from 10.96% a year earlier but still low for a commercial bank.
This means a considerable share of deposits is held in cash, securities and other assets rather than loans to businesses and households. Cash and investment securities together accounted for about 53.17% of total assets.
The conservative structure supports liquidity and reduces immediate credit exposure, but it may constrain returns if lower-risk assets generate weaker yields. Management has acknowledged that deploying the expanded deposit base more efficiently will be a priority during the remainder of 2026.
Another balance-sheet item deserving scrutiny is “other assets,” which stood at GH¢6.71 billion, equivalent to approximately 30.75% of total assets. The summary statements do not provide enough detail to determine the composition, maturity or earning quality of this substantial balance.
For investors, greater disclosure around the item would improve understanding of the bank’s asset structure and the risks attached to such a large concentration.
Asset quality improved, but it remains an area of vulnerability. The non-performing loan ratio declined from 14.28% to 11.20%. The direction is encouraging, especially alongside rapid loan growth, but an NPL ratio above 10.00% remains elevated.
The bank reported an NPL ratio excluding the loss category of only 0.09%, compared with 0.10% in 2025. This suggests that most reported non-performing loans may already be classified in the loss category and substantially provided for.
That reduces the prospect of fresh losses from those exposures, but recovery and write-off decisions remain important. New lending must also be monitored carefully because a 66.65% expansion in loans can create future asset-quality problems if underwriting standards weaken in pursuit of growth.
Liquidity is one of the clearest strengths. The liquid ratio improved to 169.61% from 130.80%, while the bank recorded no default in statutory liquidity requirements and attracted no related sanctions.
Capital adequacy also strengthened to 14.54% from 13.80%. Shareholders’ funds increased by 33.44% to GH¢2.37 billion, supported by retained earnings and the expanded capital base.
However, the leverage ratio was broadly unchanged, slipping marginally from 6.19% to 6.18%. With assets growing faster than profits, management must ensure that capital continues to expand sufficiently to support lending, regional operations and unexpected losses.
Cash-flow performance was less reassuring. Net cash used in operating activities increased to GH¢1.57 billion from GH¢1.18 billion. The outflow reflected the expansion of loans, investment securities and other assets, partly financed by GH¢2.38 billion in additional customer deposits.
Negative operating cash flow is not automatically alarming for a growing bank because financial institutions deploy deposits into assets. Nonetheless, the scale of the outflow reinforces the need to monitor the quality, liquidity and maturity profile of the assets being accumulated.
Overall, First Atlantic Bank’s nine-month results show a bank building scale rapidly and improving its core income base. Lower funding costs, stronger fee income, deposit growth, ample liquidity and better capital adequacy provide a credible foundation.
The weaknesses are equally visible. Profit growth lagged far behind balance-sheet expansion, earnings per share fell, trading income declined, costs rose materially and the NPL ratio remained elevated. The concentration in cash, investment securities and other assets also raises questions about how effectively deposits are being converted into higher-yielding productive assets.
The final quarter will test whether First Atlantic Bank can transform its larger balance sheet into stronger returns without compromising credit quality. For shareholders, the next phase must deliver more than growth in size; it must produce better earnings per share, sustainable margins and a clearer return from the capital and deposits entrusted to the bank.
