The Ghana Stock Exchange Financial Stocks Index (GSE-FSI) has climbed 25.18 percent year-to-date (YtD), already more than 10 percentage points above its 15 percent gain in 2024 and exceeding the broader market’s 24.97 percent rise this year.
The rally in financial stocks has been driven by strong earnings expectations, improved balance sheets and renewed investor confidence.
While attractive yields on short-term government securities were initially expected to boost bank earnings in 2025, declining Treasury bill rates and a proposed review of the cash reserve requirement (CRR) could introduce new variables.
However, with dividend payouts returning and banks posting strong financial results, the sector remains a focal point for investors.
This comes as the banking industry recorded sustained growth in 2024 – with total assets expanding by 33.8 percent, according to the Bank of Ghana’s Monetary Policy Report for January 2025.
Profitability continued to recover, though at a slower pace. Profit-after-tax (PAT) reached GH¢10.4billion in 2024 – up from GH¢8.3billion in 2023, a 26.2 percent growth rate: lower than the 224.6 percent increase recorded in the previous year, when banks were just rebounding from DDEP-related losses.
Similarly, profit-before-tax (PBT) rose by 24.4 percent; down from a 267.1 percent surge in 2023.
Despite these improvements, the industry continues to grapple with rising credit risk. The non-performing loan (NPL) ratio increased to 21.8 percent in December 2024, up from 20.6 percent the previous year as challenges in loan recoveries linger.
Leading this year’s financial stock rally is CalBank (CAL) whose share price has appreciated 129 percent YtD to GH¢0.8, making it the second-best performing stock on the GSE. Over the past four weeks alone, CAL has gained 95 percent and 158 percent in the last six months… the highest on the market. This has pushed its market capitalisation to GH¢865million.
Access Bank Ghana (ACCESS) has also seen a strong surge, with its share price climbing 53.9 percent in 2025 to GH¢8. Over the past month, the stock has gained 40 percent – placing it among the GSE’s top performers with a market cap of GH¢1.39billion.
Other banking stocks posting significant year-to-date gains include Standard Chartered Bank (SCB), up 13 percent to GH¢26; and Societe Generale Ghana (SOGEGH), which has increased 5.33 percent to GH¢1.58.
GCB Bank (GCB) has recorded a modest 3.45 percent gain this year, with its stock now trading at GH¢6.59. However, over the past 12 months it has appreciated by 92.7 percent with a market cap of GH¢1.75billion.
Ecobank Ghana (EGH) is one of the few banking stocks that has declined in 2025, shedding 2.31 percent year-to-date to GH¢6.35. Nevertheless, the stock has rebounded 1.6 percent over the last four weeks. Its market value currently stands at GH¢2.05billion.
Republic Bank Ghana (RBGH) has lost 9.09 percent this year, trading at GH¢0.6 despite a 25 percent increase over the past year. Meanwhile, Agricultural Development Bank (ADB) and the Trust Bank Limited (TBL) have remained stagnant at GH¢5.06 and GH¢0.83 respectively. The former has remained so for nearly six years and the latter since August 2024.
In the insurance segment, Enterprise Group Limited (EGL) has seen its share price rise 13.6 percent this year to GH¢2.25. The stock has gained 10 percent over the past four weeks and 24.3 percent in the last six months, ranking eighth in YtD performance.
SIC Insurance Company Limited (SIC) has recorded strong performances in the segment with a year-to-date gain of 44.4 percent, bringing its share price to GH¢0.39. Over the past month alone SIC has surged 34 percent, making it fifth-best performer on the GSE. Over the past year, the stock has appreciated 62.5 percent.
Investor sentiment toward banking stocks remains positive, driven by expectations of strong 2024 financial results and the return of dividend payments.
Standard Chartered Bank’s dividend payout in 2024 has set a precedent, with other banks expected to follow suit this year.
“Barring a significant downturn, we expect the banking sector to do well in 2025 – supported by strong earnings growth, probable return of dividend payout and favourable economic conditions,” Databank noted in its outlook for the sector.
At the fourth trading week’s beginning in March 2025, the Accra Bourse had a market value of GH¢135.09billion.
Source: thebftonline.com
