- Societe Generale Ghana’s Half-Year Profit Falls 47.69% to GH¢128.21m
Societe Generale Ghana Plc reported a sharp decline in profitability during the first half of 2026 as weaker interest earnings and trading revenue outweighed growth in customer loans, deposits and operating cash flow. The Ghana Stock Exchange-listed bank recorded a profit after tax of GH¢128.21 million for the six months ended June 30, down 47.69% from GH¢245.08 million in the corresponding period of 2025.
Profit before tax declined by a similar margin, falling 47.50% to GH¢198.37 million from GH¢377.86 million, while earnings per share dropped to GH¢0.36 from GH¢0.69. The performance suggests that the bank’s expanding balance sheet has yet to translate into stronger earnings, with the benefits of loan and deposit growth offset by a significant contraction in interest income and higher operating costs.
Interest income, the largest source of revenue for most commercial banks, declined by 27.82% to GH¢526.22 million from GH¢729.07 million. Interest expense also fell, declining by 17.89% to GH¢93.36 million, but the reduction was insufficient to compensate for the larger fall in income from loans, investments and other interest-earning assets.
Net interest income consequently dropped by 29.66% to GH¢432.87 million from GH¢615.38 million. The contraction may reflect lower yields on government securities, changing asset allocation and the broader reduction in market interest rates, although the unaudited statements did not provide a detailed explanation of the underlying drivers.
The impact was partly softened by stronger fee and commission earnings.
Fee and commission income rose 10.13% to GH¢88.48 million, while related expenses declined to GH¢32.68 million from GH¢36.50 million. This lifted net fee and commission income by 27.29% to GH¢55.80 million.
The improvement indicates stronger earnings from transactional banking, account services, trade finance and other fee-generating activities, but the absolute gain was too small to offset the reduction in net interest income.
Net trading revenue also weakened, falling 33.62% to GH¢43.35 million, while income from other financial instruments carried at fair value declined to GH¢6.11 million from GH¢10.60 million.
However, other operating income swung to a positive GH¢6.92 million from a loss of GH¢70.71 million in the previous period.
That reversal lifted total other operating income to GH¢56.37 million from just GH¢5.18 million and provided an important cushion against declining core banking revenue.
Overall operating income nevertheless fell by 17.96% to GH¢545.04 million from GH¢664.39 million.
Operating income after impairment stood at GH¢554.42 million, down 21.31% from GH¢704.56 million.
The bank reported a net impairment gain of GH¢9.38 million compared with GH¢40.17 million in the same period of 2025. The positive amount indicates that recoveries or reversals exceeded new credit-loss provisions, but the benefit was substantially smaller than a year earlier.
Cost pressure also weighed on the results.
Total operating expenses increased by 8.98% to GH¢356.05 million from GH¢326.70 million.
Personnel expenses rose 7.90% to GH¢158.30 million, while depreciation and amortisation increased by 23.71% to GH¢75.18 million. Other operating expenses advanced by 2.81% to GH¢122.57 million.
The combination of lower operating income and higher costs materially weakened the bank’s operating efficiency.
Societe Generale Ghana’s cost-to-income ratio, calculated from the published operating income and operating expenses, increased to approximately 65.33% from 49.17% a year earlier. This means the bank spent more than GH¢0.65 to generate every GH¢1.00 of operating income during the period, compared with about GH¢0.49 in the first half of 2025.
The higher ratio indicates that cost growth is outpacing revenue and will remain an important area for management attention.
Despite the earnings decline, the bank expanded its balance sheet.
Total assets increased by 12.57% to GH¢10.97 billion from GH¢9.75 billion. Loans and advances to customers grew by 21.80% to GH¢4.65 billion from GH¢3.82 billion, signalling increased credit extension to businesses and households.
Customer deposits rose by 20.17% to GH¢6.84 billion from GH¢5.69 billion, providing additional funding for the loan book and other assets. Cash and cash equivalents increased by 38.20% to GH¢3.63 billion, while debt instruments held at amortised cost declined by 28.71% to GH¢1.62 billion.
The figures suggest a significant shift in asset composition from government and other fixed-income securities towards customer lending and liquidity holdings. Loans accounted for approximately 42.35% of total assets at the end of June, compared with 39.14% a year earlier.
Customer deposits represented about 62.36% of total assets, reinforcing their role as the bank’s principal funding source. The growth in lending occurred alongside an improvement in asset quality.
The non-performing loan ratio declined to 13.85% from 17.90%, a reduction of 4.05 percentage points. While the improvement is positive, the ratio remains elevated, with almost GH¢14.00 of every GH¢100.00 in loans classified as non-performing.
Continued reductions will be necessary to lower credit risk, release capital and support sustainable expansion of the loan portfolio. The bank’s capital adequacy ratio declined to 19.62% from 22.70%, while the leverage ratio fell to 13.69% from 15.57%. Its liquidity ratio also eased to 107.97% from 116.99%, although the bank reported no defaults or sanctions relating to statutory liquidity requirements.
The lower capital ratios partly reflect the growth in assets and lending, which increases the amount of regulatory capital required to support the bank’s risk exposure.
Shareholders’ funds declined by 5.00% to GH¢2.56 billion from GH¢2.69 billion despite the half-year profit. The reduction was driven by a GH¢173.69 million dividend payable and a GH¢16.03 million transfer from retained earnings to the statutory reserve.
Retained earnings fell to GH¢1.09 billion from GH¢1.26 billion, while the statutory reserve increased to GH¢560.49 million. Shareholders have approved a dividend of GH¢0.24 per share for the 2025 financial year, which the bank said would be paid in September 2026 following approval from the Bank of Ghana.
Cash generation improved sharply even as accounting profit declined. Net cash from operating activities reached GH¢659.02 million, reversing a GH¢497.36 million outflow in the first half of 2025. The improvement was driven mainly by a GH¢1.00 billion increase in customer deposits and a GH¢209.27 million rise in other liabilities, partially offset by increases in loans, other assets and restricted cash balances.
Cash and cash equivalents for cash-flow purposes rose to GH¢2.31 billion from GH¢1.75 billion. Societe Generale Ghana’s half-year results therefore present a mixed picture. The bank is expanding credit, attracting more deposits, improving its non-performing loan ratio and generating stronger operating cash flow.
But profitability has weakened sharply as falling interest income and trading revenue combine with rising personnel, depreciation and operating costs.
The central challenge for the second half of the year will be whether the larger loan portfolio can generate sufficient interest and fee income to reverse the deterioration in margins and operating efficiency without compromising the recent improvement in asset quality.
