In brief
- Earnings momentum holds: Profit after tax rose 43.8% y/y to GHS 1.9bn, 2.0% ahead of our forecast. Non-interest revenue rose 79.9% and now makes up 37.7% of operating income, and the cost-to-income ratio improved to 45.4%. Net interest income lagged at 13.8% growth, as lower yields cut interest on investment securities by 24.6%.
- Lending surges, capital buffer thins: Net loans grew 83.2% y/y to GHS 25.2bn on 34.3% deposit growth, lifting the loan-to-deposit ratio to 50.1%. The NPL ratio held at 4.8%. However, the capital adequacy ratio fell to 14.6%, only 1.6pp above the 13.0% regulatory minimum.
- Rising rates should revive interest income: We expect inflation to settle around 6.0% by end-2026, helped by higher government spending, which should push interest rates up. With GHS 19.9bn in investment securities and current and savings accounts making up 93.3% of deposits, GCB is well placed to benefit, especially with the 20.0% cash reserve requirement now applied to all banks equally.
- New RMB corridor adds to fee and trading income; BUY maintained: Direct cedi-to-RMB settlement for Ghana–China trade should add to fee and FX trading income, which already covers 82.9% of operating costs. We maintain our BUY rating with a fair value of GHS 49.82, a 23.9% upside. The lower fair value reflects a higher risk-free rate (14.18%, up from 12.96%), not weaker performance.