In brief
- Earnings Growth Driven by Cost and Impairment Gains: EGH reported a 13.8% y/y increase in PAT to GHS 868.6mn (PBT +15.5% y/y to GHS 1.3bn), supported by a 14.2% y/y decline in operating expenses and a 27.8% y/y drop in impairment charges, which more than offset soft non-interest income.
- Top-Line Momentum Remains Weak: Total income declined 0.6% y/y as interest income stayed broadly flat (+0.8% y/y) amid a declining rate environment, while non-interest income fell 15.1% y/y on weaker trading and other operating income. Net interest income grew 7.3% y/y, helped by a 14.2% y/y drop in interest expense.
- Balance Sheet Expansion Tilted Toward Securities: Loans and advances expanded 42.5% y/y to GHS 13.7bn and investment securities surged 71.6% y/y to GHS 16.4bn. Deposits grew 30.1% y/y to GHS 37.7bn (CASA at 87.4%), but the loan-to-deposit ratio remained low at 36.3%, leaving significant excess liquidity.
- Outlook Constrained by Weak Core Earnings Drivers: We believe EGH’s earnings outlook remains more dependent on cost discipline, lower impairments and gradual balance sheet growth than broad-based revenue expansion. Elevated NPLs (albeit improved to 14.4%) and soft funded income momentum are likely to constrain earnings expansion, though improving macro conditions could support gradual recovery in transaction and trading activity.