1Q2026 Earnings Update 

Standard Chartered Bank Ghana (SCB) released its 1Q2026 results on 30 April 2026, reporting a marginal 0.4% y/y decline in profit after tax to GHS 175.4mn, despite a strong 36.1% y/y increase in profit before tax to GHS 263.2mn. The deviation between pre-tax and bottom-line performance was driven by a sharp 408.6% y/y surge in income tax, which absorbed much of the earnings uplift. This net earnings outturn trailed our forecasts by 12.5%, owing to lower-than-expected net interest income performance.
At the top line, interest income fell by 10.1% y/y to GHS 217.6mn, as compressed interest rates drove a 40bps y/y contraction in net interest margin to 2.5%, despite a 32bps reduction in cost of funds to 0.3%. Non-interest income provided meaningful support, growing 20.6% y/y, largely on the back of a 97.4% y/y surge in net trading income. Total operating income consequently rose modestly by 2.6% y/y to GHS 424.5mn, with non-interest income the primary driver of that growth. As it relates to costs, operating expenses declined 2.8% y/y to GHS 210.3mn, supported by a more favourable FX environment and contained cost growth. This drove a 278bps improvement in the cost-to-income ratio to 49.5%, reflecting tighter cost discipline and improved operating efficiency. Credit costs provided a significant boost to earnings, with the bank recording a net impairment write-back of GHS 48.9mn, representing a 1,373.6% y/y swing and driving the cost of risk to zero. On the balance sheet, net loans and advances declined sharply by 21.8% y/y to GHS 1.8bn, reinforcing the bank’s cautious stance amid elevated credit risk. Investment securities expanded by 22.5% y/y to GHS 4.3bn, indicating a continued shift toward lower-risk government instruments. Customer deposits grew 13.6% y/y to GHS 12.7bn, further suppressing the loan-to-deposit ratio to 14.3% and highlighting persistent liquidity drag. Total assets increased 10.9% y/y to GHS 17.3bn, while shareholders’ funds rose strongly by 31.7% y/y to GHS 3.0bn, supporting capital adequacy. Asset quality remains a key point of stress, with the NPL ratio climbing 286bps y/y to 27.0%, underscoring ongoing pressure in the loan portfolio and constraining risk appetite. Capital buffers nonetheless remain solid, with CAR at 25.2%, albeit marginally lower by 32bps y/y.
Overall, SCB’s 1Q2026 results reinforce the structural theme of constrained core earnings. While non-funded income growth, cost discipline, and impairment write-backs supported headline profitability, the continued contraction in the loan book, margin compression, and elevated NPL levels limit earnings quality and sustainability. A meaningful recovery in profitability will depend on sustained NPL resolution and a tilt toward risk asset growth, without which earnings will remain reliant on volatile non-funded income streams and episodic credit reversals.