ADB Returns to Profitability as Recapitalisation Lift Balance Sheet
The Agricultural Development Bank (ADB) has recorded a strong return to profitability in 2025, driven by recapitalisation efforts, improved loan recoveries and stronger core banking performance, marking a significant turnaround after years of financial strain.
The bank posted a profit after tax of GH¢367.3 million, a substantial rise from GH¢35.1 million recorded in the previous year. The recovery was underpinned by a sharp increase in net interest income and a notable reduction in impairment charges, signalling improved operational efficiency and asset management.
Net interest income more than doubled to GH¢1.37 billion from GH¢723 million, supported by higher interest earnings and reduced funding costs. This contributed to a rise in total operating income to GH¢1.75 billion, reflecting improved performance in core banking activities and stronger fee-based income streams.
A key driver of the turnaround was a significant strengthening of the bank’s capital position. Total equity almost doubled to GH¢2.48 billion, buoyed by a GH¢850 million deposit for shares alongside retained earnings. This infusion effectively reversed years of accumulated losses and restored the bank’s capital base.
As a result, ADB’s capital adequacy ratio improved markedly to 27.17 per cent, a dramatic recovery from negative levels just two years ago. The gains were further supported by loan recoveries estimated at over GH¢381 million, which helped shore up the balance sheet.
The bank’s total assets also expanded to GH¢17.9 billion from GH¢14.6 billion, largely driven by growth in cash holdings and investment securities. However, this expansion reflects a cautious approach to risk, with the bank scaling back its lending activities.
Loans and advances declined to GH¢2.01 billion from GH¢2.57 billion, indicating a continued reduction in credit exposure. At the same time, cash and bank balances surged to GH¢9.9 billion, suggesting a strategic focus on liquidity preservation and balance sheet stability.
Customer deposits rose to GH¢13.2 billion, pointing to renewed confidence among depositors and improved funding stability. This inflow of deposits has further strengthened the bank’s liquidity position, with the liquid ratio climbing to 137.3 per cent, well above regulatory requirements.
Impairment losses on loans declined to GH¢231.8 million from GH¢302.9 million, contributing to the improved bottom line. Despite this, asset quality remains a concern. The bank’s non-performing loans ratio is still elevated at over 70 per cent, highlighting ongoing challenges within its loan portfolio.
Operating costs remain relatively high, with personnel and other operating expenses exceeding GH¢838 million, reflecting the cost of maintaining its nationwide operations. Nevertheless, the bank has demonstrated improved financial discipline, with no statutory liquidity breaches recorded during the period.
Cash flows from operating activities remained strong at GH¢2.86 billion, although lower than the previous year. This indicates a stabilising but still active phase of balance sheet adjustments as the bank consolidates its recovery.
Overall, ADB’s 2025 performance signals a transition from financial distress towards early recovery, with notable gains in profitability, capital strength and liquidity. However, the contraction in lending activity presents a strategic challenge.
The bank must now balance risk management with growth, particularly in expanding credit while maintaining asset quality. For policymakers and stakeholders, the focus will increasingly shift towards how effectively ADB can rebuild its loan portfolio, support the agricultural sector, and sustain long-term earnings growth without undermining the gains achieved so far.
