BANKS must restrategise their business models to reflect the current low-interest environment to stay profitable, an Economist at the University of Ghana, Professor Ebo Turkson, has advised.
He said the recent economic gains, including declining interest rates and improved macroeconomic stability was a sustainable one that would benefit the economy in the long term, and an opportunity for banks to prepare for a new phase of growth.
Speaking at the 2026 Ghana Banking Forum in Accra on Tuesday, he said financial institutions were required to focus more on areas such as transaction services and other non-interest income opportunities.
Forum
The event was organised by PwC Ghana “When rates recede: Sustaining and returning value in Ghana's Banking Sector through a falling interest rate cycle.”
It brought together leaders across the banking ecosystem including Chief Executive Officers (CEOs), Chief Finance Officers (CFOs), the regulator, members of the Ghana Association of Banks (GAB) and business associations to discuss how the sector could adapt its strategies, product offerings and revenue models to a period of easing monetary policy and improving macroeconomic fundamentals.
Prof. Ebo Turkson who is a member of the Monetary Policy Committee (MPC) of the Bank of Ghana (BoG), explained that banks could no longer rely on wide lending margins and high returns from treasury bills as declining interest rates reduce profitability.
Therefore, he urged banks to increase lending to the productive sector, while expanding other fee-based income streams such as digital banking, trade finance and advisory services.
A Senior Partner at PwC Ghana, Vish Ashiagbor, said although lower interest rates signalled improvements in the economy, they also posed challenges to banks whose earnings remain heavily dependent on interest income.
He explained that the banking sector's profitability was not only important to shareholders but also critical to ensuring a sustainable financial sector capable of supporting national development.
"Our concern is not profitability for its own sake, but profitability that guarantees the sustainability of the banking sector to drive national development," he said.
Banking survey
Presenting PwC's 2026 Ghana Banking Survey, Mr Ashiagbor said banks continue to rely largely on net interest income despite changes in the interest rate environment.
While banks have gradually shifted from loans and advances towards investment securities, he noted that interest income still dominates their revenue streams.
He further indicated that periods of lower interest rates often encourage banks to increase lending, however that has historically been followed by rising non-performing loans (NPLs), raising concerns about credit quality.
Mr Ashiagbor also quizzed why credit continued to flow mainly to the services, commerce and finance sectors, despite PwC's analysis suggesting that sectors such as manufacturing recorded relatively lower default rates.
To help banks remain profitable in the current environment, he proposed seven strategic business models, including specialising in specific customer segments, expanding advisory services, strengthening partnerships with Financial Technology (FinTech) firms, focusing on large-scale funding, or building efficient product-driven operations.
He added each bank must determine the strategy that best suits its long-term growth and sustainability.
Conditions change
For his part, the CEO of GAB, John Awuah, emphasised that banks do not necessarily make money from high interest rates alone, adding that the market dynamics allowed them to adapt when conditions change.
“I don’t think there is any pain in there. The market is a demand and supply market,” he said, stressing that banks would find ways to operate profitably under different interest rate conditions.
According to him, the current trend was not new, as Ghana’s interest rate environment had changed significantly over the years, moving from very high levels to lower rates.
He added that the biggest beneficiaries of lower interest rates would be businesses and customers, as cheaper credit would support growth in the real sector.