Despite the Covid-19 pandemic, return on equity remains above 20% at three of the country’s four largest banks.
Return on equity (ROE) at leading Ghanaian banks dipped last year as the country’s rapid growth was halted by the Covid-19 pandemic, leading to a sharp decline in commodity exports. Nonetheless, ROE remains above 20% at three of the country’s four largest banks.
The west African country’s economy had grown at an average of 7% in 2017-19, according to the World Bank, before experiencing a sharp contraction in the second and third quarters of 2020.
Ecobank Ghana, the largest bank in the country by assets and Tier 1 capital, saw ROE fall to 22.5% in 2020 from 24.9% in 2019, according to The Banker Database. The bank’s ROE stood between 24-25% during 2017-2019 and reached 34.0% in 2016.
GCB Bank, the second-largest bank in the country by both metrics, saw ROE fall to 20.4% in 2020 from 24.1% in 2019.
Stanbic Bank Ghana, third largest by assets and fifth largest by Tier 1, saw ROE fall to 19.4% in 2020 from 20.7% in 2019. The bank posted ROE between 20-24% during 2016-2019.
Absa Bank Ghana, the fourth-largest lender by assets and third largest by Tier 1, saw ROE fall to 24.2% in 2020 from 28.7% in 2019. The bank posted ROE of 38.5% in 2016.
Trends identified using The Banker Database, an online database providing comprehensive financial data and insight for 4000 of the world's leading banks in 190 countries. Contact us.
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