Banks Must Rethink Business Models as Falling Interest Rates Reshape Profitability — Prof. Turkson
Banks in Ghana must urgently restrategise their business models to remain profitable in the country’s new low‑interest environment, Economist and University of Ghana Professor, Ebo Turkson, has advised.
Speaking at the 2026 Ghana Banking Forum in Accra on Tuesday, Prof. Turkson said recent economic gains — including declining interest rates and improved macroeconomic stability — signal a sustainable shift that will benefit the economy in the long term. He described the moment as an opportunity for banks to reposition for a new phase of growth.
The forum, organised by PwC Ghana under the theme “When rates recede: Sustaining and returning value in Ghana’s Banking Sector through a falling interest rate cycle,” brought together CEOs, CFOs, regulators, members of the Ghana Association of Banks (GAB) and business leaders to discuss how banks can adapt their strategies and revenue models in a period of easing monetary policy.
Prof. Turkson, who also serves on the Bank of Ghana’s Monetary Policy Committee, stressed that banks can no longer depend on wide lending margins and high returns from treasury bills, as falling interest rates will continue to squeeze profitability.
He urged financial institutions to increase lending to the productive sector while expanding fee‑based income streams such as digital banking, trade finance and advisory services.
PwC: Lower Rates Good for Economy, Tough for Banks
Senior Partner at PwC Ghana, Vish Ashiagbor, said although lower interest rates reflect improving economic conditions, they also pose challenges for banks whose earnings remain heavily reliant on interest income.
“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.
Presenting PwC’s 2026 Ghana Banking Survey, Mr. Ashiagbor noted that banks continue to rely heavily on net interest income despite shifts in the interest rate environment. He warned that periods of lower interest rates often lead to increased lending — historically followed by rising non‑performing loans (NPLs), raising concerns about credit quality.
He also questioned why credit continues to flow mainly to the services, commerce and finance sectors, even though PwC’s analysis shows that manufacturing records relatively lower default rates.
To help banks remain profitable, he proposed seven strategic business models, including specialising in specific customer segments, expanding advisory services, strengthening partnerships with FinTechs, focusing on large‑scale funding, and building efficient product‑driven operations.
GAB: Banks Can Adapt to Any Rate Environment
CEO of the Ghana Association of Banks, John Awuah, said banks do not necessarily thrive only when interest rates are high, noting that market dynamics allow 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, adding that banks will find ways to operate profitably under different interest rate conditions.
He emphasised that Ghana’s interest rate environment has shifted significantly over the years, and the biggest beneficiaries of lower rates will be businesses and customers, as cheaper credit supports growth in the real sector.