The Bank of Ghana has issued a cautionary note to financial institutions that rely heavily on interest income, highlighting increasing profitability risks in the current economic climate.
According to the central bank, banks with a high dependence on interest-based revenue streams are more vulnerable to shifts in lending rates, deposit costs, and overall market conditions. The warning underscores the need for diversified income sources and prudent risk management to sustain long-term financial stability.
Industry experts say the BoG’s advisory could prompt banks to reevaluate their business models, explore non-interest income channels, and strengthen resilience against potential shocks in the banking sector.
The central bank’s alert comes amid rising inflation and tighter monetary policies, which could further squeeze margins for interest-reliant institutions.
Analysts note that banks that fail to adapt may face eroding profitability and heightened regulatory scrutiny, making this an urgent priority for sector players.
