Coverage: Q3 2025 · Information to 16 December 2025
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TGB Quarterly Regional Banking Monitor · 16 December 2025
Central banks in Pretoria, Accra and Nairobi cut rates between September and December 2025, while bad-loan ratios fell but stayed high in Ghana and Kenya, and Mozambique's central bank kept its easing modest, citing the risks from the government's delayed payments on domestic debt.
The desk view
Most of the central banks covered here cut rates in the second half of 2025. The South African Reserve Bank cut to 6.75% in November under a new 3% inflation target, the Bank of Ghana took its rate down by 700bp in two moves to 18.0%, and the Central Bank of Kenya cut twice to 9.00%. Nigeria made a 50bp cut to 27.00% in September and then held. Bank balance sheets are improving from very different starting points: South African banks' return on equity averaged 15.81% and their CET1 ratio 13.22% in the year to June 2025, while Ghana's NPL ratio was still 19.5% in October and Kenya's 16.5% in November. The pressure points are sovereign exposure, most visibly in Mozambique, where late payment of domestic debt instruments has kept the easing modest, and the pace at which lower policy rates reach private credit.
The regional picture
Where policy rates moved in the region's larger banking systems in the second half of 2025, they moved down, but at very different speeds. The South African Reserve Bank (SARB) held its repo rate at 7% on 18 September 2025 and then cut it by 25bp to 6.75% on 20 November, with effect from 21 November. The Central Bank of Nigeria (CBN) reduced its Monetary Policy Rate by 50bp to 27.00% at its meeting of 22-23 September 2025 and kept it at 27.0% at its meeting of 24-25 November. The Central Bank of Kenya (CBK) cut its Central Bank Rate by 25bp to 9.25% on 7 October 2025 and by a further 25bp to 9.00% on 9 December. The Bank of Ghana cut by 350bp to 21.5% on 17 September 2025 and by another 350bp to 18.0% on 26 November. The Banco de Moçambique lowered its MIMO rate from 9.75% to 9.50% on 14 November 2025.
Others held. The Bank of Tanzania kept its Central Bank Rate at 5.75% in October 2025, the National Bank of Ethiopia kept its National Bank Rate at 15% at its September 2025 meeting, and the Central Bank of West African States (BCEAO) kept its main rate for the West African Economic and Monetary Union (WAEMU) at 3.25% on 3 December 2025. Policy rates therefore ranged from 3.25% in WAEMU to 27.0% in Nigeria. WAEMU inflation was -1.3% in the third quarter of 2025, Kenyan inflation 4.5% in November 2025 and Mozambican inflation 4.8% in October 2025, while Ethiopian inflation was 13.6% in August 2025.
Policy rates after the last decision on or before 16 December 2025, %
Source: Central Bank of Nigeria, Monetary Policy Decisions (key decisions of the 301st, 302nd and 303rd MPC meetings), 25 November 2025; Bank of Ghana, Monetary Policy Committee press release, 26 November 2025, 26 November 2025; National Bank of Ethiopia, Press release: Monetary Policy Committee meeting No. 004, 29 September 2025; Banco de Moçambique, Economic Outlook and Inflation Forecasts, November 2025 (No. 60), 2 December 2025; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 9 December 2025, 9 December 2025; South African Reserve Bank, Statement of the Monetary Policy Committee, 20 November 2025, 20 November 2025; Bank of Tanzania, Monetary Policy Committee Statement, October 2025, 2 October 2025; Banque Centrale des États de l'Afrique de l'Ouest (BCEAO), Réunion ordinaire du Comité de Politique Monétaire de la BCEAO tenue le 3 décembre 2025 (communiqué de presse), 3 December 2025; South African Reserve Bank, Financial Stability Review, Second edition 2025, 30 November 2025.
Banking-system indicators are published on different calendars, so the comparisons below mix reference dates: South African system data are averages for the year to June 2025, Ghanaian and Kenyan data run to October and November 2025, Tanzanian data to August 2025 and WAEMU credit data to September 2025.
South Africa: a lower target and a cut
The SARB's September decision was split: four members preferred to hold at 7% and two favoured a 25bp cut. At that meeting the Bank noted that it had reduced rates by 125bp since September 2024. The November cut therefore took the cumulative reduction since September 2024 to 150bp. It was unanimous, and members agreed there was now scope to make the stance less restrictive in the light of an improved inflation outlook.
The more important change was to the framework. The revised inflation target, agreed between the Minister of Finance and the Governor, is 3% plus or minus 1 percentage point, replacing the 3-6% range. CPI inflation had risen to 3.6% in October 2025. With the repo rate at 6.75%, the policy rate stood 3.15 percentage points above October inflation. The SARB also pointed to the recent credit rating upgrade from Standard & Poor's and to South Africa's exit from the Financial Action Task Force (FATF) grey list as evidence of reform progress. The SARB's second Financial Stability Review (FSR) of 2025 recorded that the FATF had announced the removal on 24 October 2025. The MPC also modelled a risk scenario of higher administered prices linked to a rapid correction of the R54 billion electricity pricing error.
System soundness
The FSR found that banking-sector return on equity remained above its 10-year average and that capital adequacy ratios remained robust. Its Prudential Authority data, averaged for the year to June 2025, show a total capital adequacy ratio of 17.22% and a common equity Tier 1 ratio of 13.22%. Return on equity rose to 15.81% from 15.15% in 2024, a gain of 0.66 percentage point. Impaired advances eased to 5.20% of gross loans and advances from 5.30%. The liquidity coverage ratio was 149.4%.
South African banking-sector indicators (annual averages; 2025 is year to date to June 2025)
| Indicator | 2024 | 2025 |
|---|---|---|
| Total capital adequacy ratio | 17.20% | 17.22% |
| Common equity Tier 1 ratio | 13.29% | 13.22% |
| Impaired advances to gross loans and advances | 5.30% | 5.20% |
| Return on equity (smoothed) | 15.15% | 15.81% |
| Return on assets (smoothed) | 1.13% | 1.18% |
| Liquidity coverage ratio | 148.7% | 149.4% |
| Total loans and advances, year-on-year change | 5.20% | 6.20% |
Source: South African Reserve Bank, Financial Stability Review, Second edition 2025, 30 November 2025.
Total assets averaged R8,271.6 billion in the year to June 2025, up 7.32% year on year, and loans and advances R5,877.1 billion, up 6.20%. The FSR's risk assessment points to concentration and the sovereign. The five largest banks held 89.69% of banking-sector assets, and the SARB listed concentration in the financial system as a new risk, citing a Herfindahl-Hirschman Index above 0.18 for the banking sector. Public sector debt was still elevated at 78.1% of GDP as of June 2025. Non-resident investors increased their holdings of government bonds after the June 2025 FSR, while banks' exposure to sovereign debt grew at a slower pace. The credit-to-GDP gap was 0.81%, below the 2-percentage-point threshold used as a risk benchmark. Corporate credit expanded, largely on renewable-energy investment and working-capital borrowing, while household borrowing remained subdued. Households remain the weaker link: debt fell to 62.4% of disposable income in June 2025 and debt-service costs to 8.8%, but the SARB judged that the risk of household distress had eased only slightly and remained elevated. On the policy side, the SARB is implementing a positive cycle-neutral countercyclical capital buffer and developing indicators to set its level. Its overall judgement is that the financial system remained resilient and should stay so over the forecast period to November 2026. A buffer built in benign conditions gives the authorities capital they can release in a downturn without having to tighten first.
Nigeria: a cut, then a tighter corridor
The CBN's September package combined easing with liquidity measures. Alongside the 50bp cut to 27.00%, it set the standing facilities corridor at +250/-250bp around the policy rate, cut the cash reserve ratio for commercial banks to 45% while keeping merchant banks at 16.00%, and introduced a 75% cash reserve requirement on non-TSA public sector deposits. The rate had been held at 27.50% at the July 2025 meeting. In November the MPC kept the rate at 27.0% but moved the corridor to +50/-450bp. That puts the lending facility 0.5 percentage point above the policy rate, at 27.5%, and the deposit facility 4.5 percentage points below it, at 22.5%. The liquidity ratio was kept at 30.00% at both meetings. Against the September corridor, the change lowered the deposit facility rate from 24.5% to 22.5% and the lending facility rate from 29.5% to 27.5%, reducing the return on surplus funds placed with the central bank.
Bank results show how much of the previous year's profit came from non-interest items. Guaranty Trust Holding Company (GTCO) reported group profit before tax of ₦900.8 billion for the nine months to 30 September 2025, against ₦1,219.5 billion a year earlier, a fall of 26.1%. Other income fell to ₦85.8 billion from ₦577.4 billion. Net interest income rose 21.8% to ₦952.1 billion. Loans and advances to customers grew 16.5% from December 2024 to ₦3,244.5 billion, and customer deposits 18.4% to ₦11,851.7 billion. Share premium increased by ₦160.1 billion over the same period, to ₦489.4 billion.
Guaranty Trust Holding Company: selected group figures, ₦ billion
| Item | Nine months to 30 September 2024 | Nine months to 30 September 2025 |
|---|---|---|
| Net interest income | 781.5 | 952.1 |
| Other income | 577.4 | 85.8 |
| Profit before tax | 1,219.5 | 900.8 |
Guaranty Trust Holding Company: balance sheet, ₦ billion
| Item | December 2024 | 30 September 2025 |
|---|---|---|
| Loans and advances to customers | 2,785.7 | 3,244.5 |
| Deposits from customers | 10,013.0 | 11,851.7 |
| Share premium | 329.2 | 489.4 |
Kenya: easing reaches credit, slowly
The CBK's October and December cuts took the Central Bank Rate down by 50bp, to 9.00%. Overall inflation was 4.6% in September 2025 and 4.5% in November, below the 5% midpoint of the 5±2.5% target range. The Committee said in December that there was scope for a further 25bp cut, which would add to earlier actions aimed at stimulating bank lending to the private sector.
Credit is responding. Growth in commercial banks' lending to the private sector rose from -2.9% in January 2025 to 5.0% in September and 6.3% in November. Credit to manufacturing, building and construction, trade and consumer durables remained strong in November. Average lending rates fell to 14.9% in November 2025 from 17.2% a year earlier, a decline of 2.3 percentage points. The revised Risk-Based Credit Pricing Model, due to be fully operational by March 2026, is intended to improve the transmission of policy decisions to bank lending rates.
Asset quality improved but remains the system's weak point. The gross NPL ratio was 17.1% in September 2025, down from 17.6% in June, and fell to 16.7% in October and 16.5% in November. The November figure was 1.1 percentage points below the August level. In its October release the CBK noted decreases in NPLs in building and construction, real estate, tourism, restaurants and hotels, and trade. In December it reported decreases in mining and quarrying, energy and water, personal and household loans, and transport and communication. The CBK described the sector as stable and resilient, with strong liquidity and capital adequacy ratios. With about a sixth of gross loans still non-performing, asset quality is the weakest of these indicators.
Kenya: banking indicators reported in the CBK's MPC releases (rate after each decision; other data for September and November 2025)
| Indicator | 7 October 2025 release | 9 December 2025 release |
|---|---|---|
| Central Bank Rate after the decision | 9.25% | 9.00% |
| Gross NPL ratio | 17.1% | 16.5% |
| Private-sector credit growth | 5.0% | 6.3% |
| Average commercial bank lending rate | 15.1% | 14.9% |
| Overall inflation | 4.6% | 4.5% |
Source: Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 7 October 2025, 7 October 2025; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 9 December 2025, 9 December 2025.
Ghana: rapid disinflation, slower balance-sheet repair
Ghana eased by more than any other central bank covered here. The two 350bp cuts in September and November 2025 took the policy rate from 25.0% to 18.0%, a reduction of 700bp; both decisions were by majority. Headline inflation fell from 23.5% in January 2025 to 11.5% in August and reached the Bank's central target of 8.0% in October. Even after the November cut, the policy rate was 10.0 percentage points above October inflation. Market rates followed: the average bank lending rate fell to 22.2% in October 2025 from 30.5% a year earlier. Real private-sector credit growth improved from a 7.1% contraction in May 2025 to 5.4% in October.
Bank solvency has improved quickly. Over the first eight months of 2025 the sector recorded continued asset growth and better profitability, asset quality and efficiency. The industry capital adequacy ratio without regulatory reliefs rose to 17.7% in August 2025 from 10.2% in August 2024, an increase of 7.5 percentage points. The NPL ratio fell to 20.8% in August 2025 from 24.8% a year earlier and to 19.5% in October 2025 from 22.7% in October 2024. The Bank of Ghana described deposit money banks as sound, profitable and well capitalised. It also said that credit risks remain elevated and that recapitalising the few undercapitalised banks and fully implementing new regulatory guidelines on NPLs would further strengthen the industry. The sovereign backdrop has eased, with total public debt down to 45.0% of GDP at end-October 2025 from 61.8% at end-December 2024.
The Bank also adjusted its operating framework. The single-currency net open position limit for banks moved from ±5% to between 0% and -10% from 1 October 2025. After the November meeting, the Bank is returning to the 14-day bill as its main open market operations instrument.
Ghana: banking and policy indicators
| Indicator | Earlier reading | Latest reading |
|---|---|---|
| Monetary Policy Rate | 21.5% (17 September 2025) | 18.0% (26 November 2025) |
| Capital adequacy ratio, without reliefs | 10.2% (August 2024) | 17.7% (August 2025) |
| NPL ratio | 22.7% (October 2024) | 19.5% (October 2025) |
| Average bank lending rate | 30.5% (October 2024) | 22.2% (October 2025) |
| Headline inflation | 23.5% (January 2025) | 8.0% (October 2025) |
Source: Bank of Ghana, Monetary Policy Committee press release, 17 September 2025, 17 September 2025; Bank of Ghana, Monetary Policy Committee press release, 26 November 2025, 26 November 2025.
Ethiopia: the credit ceiling stays, but higher
The National Bank of Ethiopia kept its policy rate at 15% at its September 2025 meeting. The more consequential decision concerned the credit ceiling: its removal had been anticipated for September 2025, but the Committee chose to retain a credit growth target with a moderate upward adjustment, from 18% to 24% for FY 2025/26. That widens permitted annual credit growth by 6 percentage points. Outstanding loans of the banking system had already grown 5.4% between June and the end of August 2025. On the fiscal side, the government did not borrow from the central bank in the first two months of FY 2025/26. The NBE described the sector as safe and sound, with low NPLs and adequate capital, but said that some segments faced liquidity pressure from high loan-to-deposit ratios. With inflation still at 13.6% in August 2025, the Committee judged that fully removing the ceiling at that stage would be imprudent, given its commitment to a tight monetary policy. The Committee said it would revisit the matter at its upcoming meetings, the next of which was set for December 2025.
Tanzania: low NPLs, strong credit
The Bank of Tanzania kept its Central Bank Rate at 5.75% and will steer the 7-day interbank rate within a corridor of ±2% around it. Mainland inflation was 3.4% in August 2025, within the 3-5% target range. Private-sector credit grew at around 16%. The Bank described the banking sector as stable and resilient, and non-performing loans declined to 3.3% in August 2025, within the 5% tolerable level. Among the systems covered here, Tanzania pairs one of the lowest NPL ratios with one of the fastest credit growth rates.
Mozambique: the sovereign constrains the easing
The Banco de Moçambique's 25bp cut to 9.50% on 14 November 2025 was described by the Bank itself as modest. It linked the caution to the government's delay in paying domestic public debt instruments. Domestic public debt, excluding loan and lease agreements and overdue liabilities, stood at 465.8 billion meticais in data to 12 November 2025, up 50.3 billion from December 2024. The Bank said the payment delays were reducing appetite for government securities and making interbank rates rigid. For banks, the effect runs through the government securities and interbank markets that the Bank says are being disrupted.
Reserve requirements remain heavy, at 29.00% for domestic-currency liabilities and 29.50% for foreign-currency liabilities, unchanged at the November meeting. The standing lending facility rate fell to 12.50% and the standing deposit facility rate to 6.50%. Reserve ratios of that size tie up a large share of bank funding at the central bank, which limits how far policy-rate cuts can lower lending rates. Inflation was 4.8% in October 2025. Credit to the economy grew 1.0% year on year in September 2025, after 2.0% in July. Between July and September 2025, average one-year lending and deposit rates fell to 17.91% and 4.90%, a spread of 13.01 percentage points.
WAEMU: low inflation, unchanged rates
The BCEAO kept its main policy rate at 3.25% and its marginal lending rate at 5.25%, levels in force since 16 June 2025, and left the reserve requirement ratio at 3.0%. Union real GDP grew 6.6% in the third quarter of 2025 after 6.5% in the previous quarter, and growth for 2025 is expected at 6.7% after 6.2% in 2024. Inflation was -1.3% in the third quarter, after 0.3% a quarter earlier. Bank lending to the private sector rose 6.0% in the year to the end of September 2025. With the nominal rate unchanged and inflation falling below zero, the policy rate measured against inflation rose in the third quarter.
Pan-African groups: the regional earnings mix
Standard Bank Group reported headline earnings of R24 billion and a return on equity of 19.1% for the half year to 30 June 2025. Its South African franchises earned R11.6 billion, or 49% of group headline earnings, and its Africa Regions franchise R9.7 billion, or 41%. The key contributors in Africa Regions were Angola, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Uganda and Zambia. Four of those markets, Ghana, Kenya, Mozambique and Nigeria, cut policy rates between September and December 2025. With 41% of first-half headline earnings coming from Africa Regions, the group's results are tied to the sovereign and asset-quality conditions described in the country sections.
Cross-country comparison
Sub-Saharan Africa banking monitor: policy rates and system indicators (reference dates in brackets)
| Economy | Policy rate | Latest inflation | Asset quality | Credit growth |
|---|---|---|---|---|
| South Africa | 6.75% (20 November 2025) | 3.6% (October 2025) | Impaired advances 5.20% (2025 to June) | Loans 6.20% y/y (2025 to June) |
| Nigeria | 27.0% (25 November 2025) | Not available | Not available | Not available |
| Kenya | 9.00% (9 December 2025) | 4.5% (November 2025) | Gross NPL 16.5% (November 2025) | Private credit 6.3% (November 2025) |
| Ghana | 18.0% (26 November 2025) | 8.0% (October 2025) | NPL 19.5% (October 2025) | Real private credit 5.4% (October 2025) |
| Ethiopia | 15% (25 September 2025) | 13.6% (August 2025) | Low NPLs (September 2025) | Bank loans 5.4% since June (August 2025) |
| Tanzania | 5.75% (October 2025) | 3.4% (August 2025) | NPL 3.3% (August 2025) | Private credit around 16% |
| Mozambique | 9.50% (14 November 2025) | 4.8% (October 2025) | Not available | Credit 1.0% y/y (September 2025) |
| WAEMU | 3.25% (3 December 2025) | -1.3% (third quarter of 2025) | Not available | Bank private credit 6.0% (September 2025) |
Source: South African Reserve Bank, Statement of the Monetary Policy Committee, 20 November 2025, 20 November 2025; South African Reserve Bank, Financial Stability Review, Second edition 2025, 30 November 2025; Central Bank of Nigeria, Monetary Policy Decisions (key decisions of the 301st, 302nd and 303rd MPC meetings), 25 November 2025; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 9 December 2025, 9 December 2025; Bank of Ghana, Monetary Policy Committee press release, 26 November 2025, 26 November 2025; National Bank of Ethiopia, Press release: Monetary Policy Committee meeting No. 004, 29 September 2025; Bank of Tanzania, Monetary Policy Committee Statement, October 2025, 2 October 2025; Banco de Moçambique, Economic Outlook and Inflation Forecasts, November 2025 (No. 60), 2 December 2025; Banque Centrale des États de l'Afrique de l'Ouest (BCEAO), Réunion ordinaire du Comité de Politique Monétaire de la BCEAO tenue le 3 décembre 2025 (communiqué de presse), 3 December 2025.
Kenya and Ghana combine double-digit NPL ratios with recovering credit growth, which makes the pace of NPL resolution the main swing factor for their banks. Tanzania and South Africa report the lowest bad-loan ratios in the table, while Mozambique stands out for weak credit growth in a market where the sovereign is paying late.
Outlook risks
In South Africa, the SARB has said that stabilising inflation at 3% implies a lower longer-term policy rate, but the FSR still flags concentration, a public debt ratio of 78.1% of GDP and elevated household distress. In Ghana, the gap between an 18.0% policy rate and 8.0% inflation keeps the real policy rate high, while the success of recapitalisation and the new NPL guidelines will decide how much of the easing reaches borrowers. In Kenya, the 16.5% NPL ratio and the move to full operation of the revised credit pricing model by March 2026 are the factors to watch for lending rates. In Nigeria, the November decision left the rate at 27.0% but placed the deposit facility rate 450bp below it. In Mozambique, the Bank has tied future decisions to the risks around its inflation projections, among which it lists delayed government debt payments. In Ethiopia, credit growth under the higher 24% ceiling, set against liquidity pressure in parts of the banking sector, is the indicator to follow.
What to watch
- 7 January 2026: next Bank of Tanzania MPC meeting, with the Central Bank Rate announced the following day.
- 26-28 January 2026: next Bank of Ghana MPC meeting.
- 28 January 2026: next Banco de Moçambique MPC meeting.
- 29 January 2026: the SARB's first MPC decision of 2026.
- February 2026: next CBK MPC meeting.
- March 2026: the revised Risk-Based Credit Pricing Model in Kenya is due to be fully operational.
Primary sources: Banque Centrale des États de l'Afrique de l'Ouest (BCEAO), Réunion ordinaire du Comité de Politique Monétaire de la BCEAO tenue le 3 décembre 2025 (communiqué de presse), 3 December 2025; South African Reserve Bank, Statement of the Monetary Policy Committee, 20 November 2025, 20 November 2025; Bank of Ghana, Monetary Policy Committee press release, 17 September 2025, 17 September 2025; Bank of Ghana, Monetary Policy Committee press release, 26 November 2025, 26 November 2025; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 7 October 2025, 7 October 2025; Central Bank of Kenya, Press release: Monetary Policy Committee meeting, 9 December 2025, 9 December 2025; Banco de Moçambique, Economic Outlook and Inflation Forecasts, November 2025 (No. 60), 2 December 2025; Central Bank of Nigeria, Monetary Policy Decisions (key decisions of the 301st, 302nd and 303rd MPC meetings), 25 November 2025; South African Reserve Bank, Financial Stability Review, Second edition 2025, 30 November 2025; South African Reserve Bank, Statement of the Monetary Policy Committee, 18 September 2025, 18 September 2025; Bank of Tanzania, Monetary Policy Committee Statement, October 2025, 2 October 2025; National Bank of Ethiopia, Press release: Monetary Policy Committee meeting No. 004, 29 September 2025; Guaranty Trust Holding Company Plc, Statement to the Nigerian Exchange: extract of unaudited IFRS results for the period ended 30 September 2025, 28 October 2025; Standard Bank Group, Standard Bank Group announces strong returns, increased dividends (interim results to 30 June 2025), 14 August 2025.