1H2026 Earnings Update
GCB Bank Plc published its 1Q2026 results on 27 July 2026, extending the strong earnings momentum seen at the start of the year while revealing a clear shift in the composition of growth. Total operating income rose by 35.6% y/y to GHS 3.7bn, maintaining the trend of strong top-line expansion in 1Q2026, although the drivers are now tilting more aggressively toward non-funded income. Net interest income increased by 17.1% y/y to GHS 2.3bn, beating our forecast by 2.2%. In contrast, non-interest revenue accelerated sharply, with fees and commissions surging by 97.2% y/y to GHS 665.2mn and trading income rising by 76.8% to GHS 701.7mn, reinforcing the bank’s revenue diversification strategy and confirming that non-funded income is increasingly becoming the core earnings engine. Cost dynamics remain broadly contained, although underlying pressures persist. Operating expenses grew by 20.2% y/y to GHS 1.7bn, slower than revenue growth, resulting in a further improvement in the cost-to-income ratio to 44.2% from 49.8% in the same period last year. This extends the efficiency gains recorded over the past year. On the risk front, impairment charges increased by 139.5% y/y to GHS 197.5mn, signaling that underlying credit risk has not fully abated as credit expansion continues. Consequently, the cost of risk edged up by 0.13pp to 0.9%. Asset quality improved, with the NPL ratio declining sharply to 4.7%, well below the Bank of Ghana’s 10.0% regulatory threshold and comfortably ahead of the end-2026 compliance deadline. Profitability remained robust, with profit before tax rising by 45.2% y/y to GHS 1.9bn and profit after tax increasing by 45.9% y/y to GHS 1.2bn, supported primarily by strong revenue growth and continued cost discipline. The earnings outturn exceeded our forecast by 1.4%, driven by stronger revenue generation and disciplined cost management. Balance sheet dynamics point to a more assertive asset growth strategy, underpinned by strong customer deposit growth of 48.8% y/y to GHS 51.2bn. The loan book expanded by 105.3% y/y, reflecting a more aggressive deployment of liquidity in line with management’s commitment to grow the loan portfolio. Investment securities also increased by 23.4% y/y, while total assets grew by 47.8% y/y, reflecting continued balance sheet expansion. Shareholders’ funds rose by 39.0% y/y, strengthening capital buffers, although the capital adequacy ratio edged down by 4.1 percentage points to 15.9% amid rapid credit expansion. Nonetheless, it remains comfortably above the 13.0% regulatory requirement.

Overall, we view 1H2026 as a continuation of GCB’s earnings expansion, albeit with a clear shift in the underlying drivers. While funded income remains solid, non-funded income has emerged as a credible and increasingly dominant growth engine. However, the sharp increase in impairments remains a key watchpoint, suggesting that underlying credit risk has not fully abated as the loan portfolio expands. In our view, sustainability remains the key issue. As rates moderate and credit costs normalise, earnings momentum will increasingly depend on the durability of non-interest income, the quality of loan growth, and the bank’s ability to contain structurally rising costs.