Community banks across Ghana are staring down a profound profit reset. The era of posting “supernormal profits” by simply parking customer deposits in high-yielding government Treasury bills is coming to an abrupt end, forcing a drastic rethink of traditional banking models.
According to Joseph Akossey, Executive Director of Proven Trusted Solutions Limited, a seismic macroeconomic shift is underway. The government, focused on its “big push” agenda and eager to eliminate the rollover risks associated with short-term debt, is aggressively pivoting toward longer-term domestic borrowing instruments—most recently evidenced by the reintroduction of domestic bonds.
The Great Yield Collapse The immediate casualty of this policy shift is the Treasury bill yield. After hovering around an attractive 28 percent in 2024 and remaining elevated into early 2025, the 91-day T-bill rate has plummeted to below 5 percent.
Because many community banks historically avoided the perceived risks of commercial lending in favor of the safety of government paper, this yield collapse threatens to decimate their primary source of interest income.
Akossey warns that boards and management teams must immediately temper their profitability expectations. “The decline in T-bill rates is a macroeconomic reality beyond the control of community banks,” he noted in an interview with the B&FT. “They must shift their focus from supernormal profit to normal profit because the conditions that supported those extraordinary earnings are being wiped out.”
By definition, Akossey explained, supernormal profits are temporary. “This year will be one of normalised earnings, and profitability will no longer come effortlessly. Banks will need prudent measures and deliberate strategies to remain competitive.”
2026: “The Year of Credit” To survive the new normal, community banks must undergo a fundamental business model transformation, pivoting aggressively toward lending. “This year is a year of credit,” Akossey declared.
He cautioned that institutions making the mistake of undervaluing their credit departments will be left behind. To lend safely and profitably, banks must heavily invest in credit risk management systems to prevent a surge in non-performing loans (NPLs). This requires properly training credit officers in loan appraisal, monitoring, and recovery. Akossey even suggested that poaching experienced credit officers from competitors is a valid strategy, stressing that management must look past the upfront hiring costs to see the long-term revenue benefits.
Furthermore, he urged banks to stop waiting passively for borrowers to walk through their doors. “A loan is a product. You must actively look for qualified customers rather than sit idle and complain that people are not applying for loans,” he said. However, he issued a stern warning against reckless lending, pointing to the Bank of Ghana’s strict directive that all banks must bring their NPL ratios below 10 percent by December 2026.
Unlocking the Potential of Microfinance and Susu Beyond traditional commercial loans, Akossey highlighted a massive, largely untapped opportunity in urban microfinance and group lending. He lamented that many local banks fail in this space because they lazily apply rural group-lending methodologies to complex urban environments.
He pointed out that some foreign financial institutions operating identical urban microfinance models in Ghana boast NPL ratios of less than one percent. “How come they are succeeding in our own environment while we struggle? It simply means we are not doing it right,” he remarked, praising institutions like Nyakrom, Juaben, Twifo, Kwahu Praso, and Ankobra West Community Banks for getting the model right.
Additionally, he championed the expansion of susu loans, which offer attractive returns and high recovery rates due to the constant, on-the-ground engagement of mobile bankers. “Dismissing the value of mobile bankers is a strategic mistake,” he warned, advising banks to adequately compensate these frontline workers who act as the bank’s eyes and ears.
Cutting Waste and Embracing “Co-opetition” Operationally, Akossey advised community banks to ruthlessly audit their expenses, distinguishing between value-creating investments (like marketing, credit systems, and staff training) and value-subtracting waste.
He also introduced a critical concept for sector survival: “co-opetition”—cooperating on pricing to avoid destructive competition. He noted the absurdity of community banks charging significantly lower fees for SMS alerts and ATM usage than universal banks, despite facing similar operational costs.
Finally, to protect their narrowing margins in a low-yield environment, community banks must aggressively chase low-cost deposits. Paying high single-digit or double-digit rates on term deposits is no longer sustainable. Mobilizing cheap current and savings account deposits, while developing innovative loan products for underserved segments, will be the ultimate key to thriving in the post-T-bill boom era.
