Coverage: Q4 2025 · Information to 17 March 2026
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TGB Quarterly Regional Banking Monitor · 17 March 2026
Central banks in South Africa, Kenya, Ghana and Nigeria cut rates between November 2025 and February 2026, as Ghanaian and Kenyan bad-loan ratios fell and South African banks lifted their common equity Tier 1 ratio to 13.89%.
The desk view
Several of the region's central banks kept easing in the fourth quarter of 2025. The South African Reserve Bank cut to 6.75% in November under a new 3% inflation target, the Central Bank of Kenya took its rate to 8.75% in two steps, and the Bank of Ghana cut by 350bp and then 250bp to 15.50%. Bank balance sheets entered 2026 in better shape: South African banks raised their common equity Tier 1 ratio to 13.89%, Kenya's gross non-performing loan ratio fell to 15.5% and Ghana's to 18.9%. The weak points are high bad-loan ratios in Kenya and Ghana, government debt held by banks, and late payment of domestic debt in Mozambique.
The regional picture
The International Monetary Fund, presenting its October 2025 regional outlook, projected sub-Saharan African growth to hold steady at 4.1% in 2025, with a modest pickup in 2026. It also warned that inflation, while easing at the regional level, remained in double digits in about one-fifth of the region, and that a shift toward domestic financing was deepening the sovereign-bank nexus. That second point matters directly for bank balance sheets, because it ties lenders' asset quality and liquidity more closely to government finances.
Most of the central banks covered here cut rates in the fourth quarter of 2025 or early in 2026, as the table below shows. In Ghana the policy rate fell by 600bp in two meetings to 15.50%, while the Bank of Tanzania kept its rate at 5.75% for the first quarter of 2026. The Central Bank of West African States (BCEAO) held at 3.25% in December 2025 before cutting to 3.00% from 16 March 2026.
The easing was not uniform. Standard Bank Group reported that inflation eased in most of its markets outside South Africa in 2025, but that average interest rates rose year on year in Angola, Nigeria, Malawi and Zambia. It also reported foreign exchange constraints in Kenya, Botswana and Mozambique, and a downgrade of Mozambique's sovereign credit rating. On the positive side, Nigeria's sovereign rating was upgraded and Nigeria was removed from the Financial Action Task Force (FATF) grey list, while the FATF announced on 24 October 2025 that South Africa had also been removed.
Policy rates after latest decision by mid-March 2026, %
Source: South African Reserve Bank, Statement of the Monetary Policy Committee, January 2026, 29 January 2026; Central Bank of Nigeria, Monetary Policy Committee decisions, 24 February 2026; Central Bank of Kenya, Monetary Policy Committee press release, meeting of 10 February 2026, 10 February 2026; Bank of Ghana, Monetary Policy Committee press release, 28 January 2026, 28 January 2026; Bank of Tanzania, Monetary Policy Committee Statement, MPC No. 240, 8 January 2026; Banco de Moçambique, Monetary Policy Committee Communiqué No. 1/2026, 28 January 2026; Banque Centrale des États de l'Afrique de l'Ouest (BCEAO), Réunion ordinaire du Comité de Politique Monétaire de la BCEAO tenue le 4 mars 2026, 4 March 2026.
Policy decisions, November 2025 to March 2026
| Central bank | Date | Decision | Rate after decision |
|---|---|---|---|
| SARB | 20 November 2025 | Cut 25bp, unanimous | 6.75% |
| SARB | 29 January 2026 | Hold; two of six members favoured a 25bp cut | 6.75% |
| CBN | 24-25 November 2025 | Hold; corridor reset to +50/-450bp | 27.0% |
| CBN | 23-24 February 2026 | Cut 50bp | 26.5% |
| CBK | 9 December 2025 | Cut 25bp | 9.00% |
| CBK | 10 February 2026 | Cut 25bp; corridor narrowed to ±50bp | 8.75% |
| Bank of Ghana | 26 November 2025 | Cut 350bp, majority | 18.0% |
| Bank of Ghana | 28 January 2026 | Cut 250bp, majority | 15.50% |
| Bank of Tanzania | 7 January 2026 | Hold for the first quarter of 2026 | 5.75% |
| Banco de Moçambique | 28 January 2026 | Cut from 9.50% | 9.25% |
| BCEAO | 3 December 2025 | Hold | 3.25% |
| BCEAO | 4 March 2026 | Cut 25bp, effective 16 March 2026 | 3.00% |
Source: South African Reserve Bank, Statement of the Monetary Policy Committee, November 2025, 20 November 2025; South African Reserve Bank, Statement of the Monetary Policy Committee, January 2026, 29 January 2026; Central Bank of Nigeria, Monetary Policy Committee decisions, 24 February 2026; Central Bank of Kenya, Monetary Policy Committee press release, meeting of 9 December 2025, 9 December 2025; Central Bank of Kenya, Monetary Policy Committee press release, meeting of 10 February 2026, 10 February 2026; Bank of Ghana, Monetary Policy Committee press release, 26 November 2025, 26 November 2025; Bank of Ghana, Monetary Policy Committee press release, 28 January 2026, 28 January 2026; Bank of Tanzania, Monetary Policy Committee Statement, MPC No. 240, 8 January 2026; Banco de Moçambique, Monetary Policy Committee Communiqué No. 1/2026, 28 January 2026; 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, 3 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 4 mars 2026, 4 March 2026.
South Africa: lower rates, a new target and stronger capital
The SARB's November 2025 decision came alongside a change in the monetary framework: the inflation target became 3% plus or minus 1 percentage point, replacing the 3-6% range. In January 2026 the Monetary Policy Committee kept the repo rate at 6.75%, with two members favouring a 25bp cut and four preferring a hold. The SARB said inflation averaged 3.2% in 2025 and was 3.6% in December. Its Quarterly Projection Model described the stance as moderately restrictive, with rates reaching neutral levels during 2027. Among upside risks it flagged electricity prices, noting that the regulator's price correction may rise from R54 billion to R76 billion.
The SARB's November 2025 Financial Stability Review found banking-sector return on equity above its 10-year average and capital adequacy ratios robust. It reported that corporate credit expanded, driven by renewable-energy investment and working-capital borrowing, while household borrowing remained subdued. The credit-to-GDP gap stood at 0.81%, below the 2-percentage-point threshold the SARB uses as a risk benchmark. The review added concentration in the financial system, especially banking, as a new structural risk; the five largest banks held 89.69% of banking assets on average in the first half of 2025. It expected the system's resilience to be maintained over the forecast period to November 2026.
Prudential Authority data for December 2025 show a larger and better-capitalised banking system. Total banking assets rose 10.29% over the year to R9,013 billion, and gross loans and advances rose 8.52% to R6,296 billion. Home loans grew more slowly, by 3.66%, consistent with the subdued household borrowing noted by the SARB. Deposits, current accounts and other creditors rose 10.86% to R7,541 billion.
South African banking sector, December 2024 and December 2025
| Indicator | December 2024 | December 2025 |
|---|---|---|
| Total assets (R billion) | 8,172 | 9,013 |
| Gross loans and advances (R billion) | 5,801 | 6,296 |
| Common equity Tier 1 ratio | 13.16% | 13.89% |
| Total capital adequacy ratio | 17.22% | 17.92% |
| Leverage ratio | 6.35% | 6.45% |
| Impaired advances to gross loans | 5.18% | 4.74% |
| Return on equity (smoothed) | 15.74% | 15.77% |
| Cost-to-income ratio | 56.61% | 57.12% |
| Liquidity coverage ratio | 155.28% | 158.26% |
| Net stable funding ratio | 118.91% | 115.30% |
| Ten largest depositors to total funding | 18.88% | 20.78% |
Capital and asset quality both improved. Impaired advances fell to R298.22 billion from R300.37 billion, and their share of gross loans fell from 5.18% to 4.74%, a decline of 0.44 percentage point in a year in which loans grew 8.52%. Twelve-month profit rose to R124.96 billion from R116.13 billion, but return on equity was little changed and the cost-to-income ratio rose. Liquidity remained ample, although the net stable funding ratio fell and the ten largest depositors supplied 20.78% of total funding, up from 18.88%. ### Large-bank results The large groups reported higher earnings for periods ending in December 2025, as the table below shows. Standard Bank's South African franchises earned R24.9 billion and its Africa Regions franchise R19.7 billion, or 51% and 40% of group headline earnings. FirstRand's net interest margin rose 8bps despite 50bps of rate cuts, and its credit loss ratio edged up to 86bps from 84bps: improvements in South African retail portfolios were offset by the normalisation of UK credit costs and higher impairments in broader Africa, mainly because of macroeconomic headwinds in Botswana.
Large South African banking groups, latest reported results
| Group | Period | Earnings | Return on equity | CET1 ratio |
|---|---|---|---|---|
| Standard Bank Group | Year to 31 December 2025 | Headline earnings R49,207m, up 11% | 19.3% (18.5%) | 13.8% |
| FirstRand | Six months to 31 December 2025 | Normalised earnings R23,234m, up 11% | 21.1% (20.8%) | 14.4% (13.6%) |
| Nedbank Group | Year to 31 December 2025 | Headline earnings R17.2bn, up 2% | 15.4% (15.8%) | 12.9% |
Source: Standard Bank Group (exchange announcement on the Namibian Stock Exchange), Standard Bank Group results for the year ended 31 December 2025 and dividend declaration, 12 March 2026; FirstRand (exchange announcement on the Namibian Stock Exchange), Unaudited results and ordinary cash dividend declaration for the six months ended 31 December 2025, 5 March 2026; Nedbank Group, A transformational year as Nedbank positions for growth (results for the year ended 31 December 2025), 3 March 2026.
The groups expect lower rates to weigh on margins. Nedbank expects the normalisation of wholesale impairments and endowment pressure from lower interest rates in 2026, with return on equity above 15% and above a cost of equity of 14.0%. Standard Bank expects its credit loss ratio to increase in 2026 but to remain in the bottom half of its 70-100bp through-the-cycle range. It also said geopolitical developments in the Middle East, particularly the conflict involving Iran, continue to introduce uncertainty, and that an escalation could affect the macroeconomic assumptions behind its guidance.
Nigeria: easing from a high base
The CBN held the Monetary Policy Rate at 27.50% at its meetings in February, May and July 2025, and then cut it by 50bp to 27.00% in September 2025, when it also lowered the cash reserve requirement for commercial banks to 45%. At its 303rd meeting on 24-25 November 2025 it held the rate at 27.0% but adjusted the standing facility corridor to +50/-450bp around the rate. It kept the cash reserve requirement for deposit money banks at 45% and the liquidity ratio at 30%. At its 304th meeting on 23-24 February 2026 it cut the rate by 50bp to 26.5% and retained both the corridor and the 45% reserve requirement.
The new corridor puts the standing deposit facility 450bp below the policy rate and the lending facility only 50bp above it. That makes it costly for banks with surplus liquidity to leave funds at the central bank, and should push them towards lending or money-market placements. Nigeria's policy rate remains far above those of the other economies in this monitor, and the 45% reserve requirement on deposit money banks continues to tie up a large part of their deposit base. Standard Bank reported that average interest rates in Nigeria rose year on year in 2025, even as the sovereign rating was upgraded and the country left the FATF grey list. It listed Nigeria among the key contributors to its Africa Regions earnings.
Kenya: cuts and falling bad loans
The CBK lowered the Central Bank Rate by 25bp to 9.00% on 9 December 2025 and by 25bp to 8.75% on 10 February 2026. Inflation stayed below the midpoint of the 5±2.5% target range, at 4.5% in November 2025 and 4.4% in January 2026. In February the CBK also narrowed the interest rate corridor around the policy rate from ±75bp to ±50bp, to align the overnight interbank rate more closely with the policy rate. The revised Risk-Based Credit Pricing Model, which is due to be fully operational by March 2026, is intended to improve the transmission of policy decisions to bank lending rates.
Transmission was already visible. Average commercial bank lending rates fell to 14.9% in November 2025 from 17.2% a year earlier, and stood at 14.8% in January 2026. Growth in bank lending to the private sector recovered from -2.9% in January 2025 to 6.3% in November 2025 and 6.4% in January 2026. The gross non-performing loan ratio fell from 17.6% in August 2025 to 16.7% in October, 16.5% in November and 15.5% in January 2026. That is an improvement of 2.1 percentage points in five months, but the ratio remains high for a system the CBK describes as stable, with strong liquidity and capital adequacy ratios.
The regional consolidation of East African banking also moved forward. In January 2026 Nedbank Group submitted an offer to acquire around 66% of NCBA, which operates across Kenya, Uganda, Tanzania and Rwanda. The offer followed Nedbank's sale of its 21% stake in Ecobank Transnational Incorporated in December 2025, as it narrowed its African focus to the SADC and East Africa regions.
Ghana: rapid disinflation, slower asset-quality repair
Ghana's cuts were far larger than those elsewhere in this monitor. The Bank of Ghana cut its Monetary Policy Rate by 350bp to 18.0% at its November 2025 meeting and by 250bp to 15.50% on 28 January 2026, both by majority decision. Headline inflation fell from 23.8% in December 2024 to 5.4% in December 2025. The Bank cut its policy rate by 900bp during 2025, which brought average lending rates down to 20.45% from 30.25% and lifted real private-sector credit growth to 13.1% from 2.0% in 2024.
The banking sector's asset quality improved more slowly than its macro backdrop. The non-performing loan ratio fell to 19.5% in October 2025 from 22.7% a year earlier, and to 18.9% in December 2025 from 21.8% in 2024, a level the Bank still described as elevated. In November it called for the recapitalisation of the few undercapitalised banks and full implementation of new guidelines aimed at reducing non-performing loans. In January it described the sector as solvent, profitable and efficient, with total assets driven by growth in domestic deposits, domestic borrowings and shareholders' funds, and asset growth mainly reflected in investments.
Ghana: macro-financial indicators
| Indicator | Earlier reading | Latest reading |
|---|---|---|
| Monetary Policy Rate | 18.0% (November 2025) | 15.50% (January 2026) |
| Headline inflation | 23.8% (December 2024) | 5.4% (December 2025) |
| NPL ratio | 21.8% (2024) | 18.9% (December 2025) |
| Average lending rate | 30.25% | 20.45% (2025) |
| 91-day Treasury bill rate | 27.73% (December 2024) | 11.08% (December 2025) |
Source: Bank of Ghana, Monetary Policy Committee press release, 26 November 2025, 26 November 2025; Bank of Ghana, Monetary Policy Committee press release, 28 January 2026, 28 January 2026.
External and fiscal buffers improved sharply. Gross international reserves rose to US$13.8 billion, or 5.7 months of import cover, at end-December 2025 from US$9.1 billion, or 4.1 months, a year earlier, and the cedi appreciated 40.7% against the US dollar in 2025 after depreciating 19.2% in 2024. Public debt fell to 45.5% of GDP at end-November 2025 from 63.1% a year earlier.
Tanzania, Mozambique and the WAEMU
The Bank of Tanzania kept its Central Bank Rate at 5.75% for the first quarter of 2026, with the 7-day interbank rate to move within a band of 3.75% to 7.75%. Mainland inflation averaged 3.5% in the fourth quarter of 2025. Credit to the private sector expanded 20.3% in 2025, and the non-performing loan ratio was 3.1%, below the tolerable level of 5%.
Mozambique shows the sovereign-bank link at its sharpest. Banco de Moçambique cut its MIMO rate to 9.25% in January 2026, with inflation at 3.2% in December 2025, but said that the easing cycle begun in January 2024 was nearing its end. The central bank said domestic public indebtedness continued to increase, affecting the normal functioning of the financial market: domestic public debt, excluding loan and lease agreements and overdue liabilities, stood at 485 billion meticais at the time of its January 2026 meeting, up 11.1 billion meticais relative to December 2025. The central bank said the government's delay in servicing domestic debt instruments was reducing appetite for government securities and causing rigidity in interbank money market rates.
In the West African Economic and Monetary Union (WAEMU), inflation was -1.4% in the third quarter of 2025 and -0.8% in the fourth quarter. Bank lending to the private sector grew 6.0% year on year at the end of September 2025, and credit to the economy rose 5.6% in 2025 after 4.5% in 2024. Growth was 6.7% in 2025. The BCEAO kept the reserve requirement at 3.0% in December 2025 and again in March 2026, and expects inflation to rise gradually to 1.4% in 2026.
Cross-country comparison
Sub-Saharan Africa banking monitor: policy rates and system indicators (reference dates in brackets)
| Country | Policy rate, latest decision | Inflation | Asset quality | Credit growth |
|---|---|---|---|---|
| South Africa | 6.75% | 3.6% (Dec 2025) | Impaired advances 4.74% of loans (Dec 2025) | Gross loans 8.52% (Dec 2025) |
| Nigeria | 26.5% | Not available | Not available | Not available |
| Kenya | 8.75% | 4.4% (Jan 2026) | Gross NPL 15.5% (Jan 2026) | Private-sector lending 6.4% (Jan 2026) |
| Ghana | 15.50% | 5.4% (Dec 2025) | NPL 18.9% (Dec 2025) | Real private-sector credit 13.1% (2025) |
| Tanzania | 5.75% | 3.5% (Q4 2025 average) | NPL 3.1% | Private-sector credit 20.3% (2025) |
| Mozambique | 9.25% | 3.2% (Dec 2025) | Not available | Not available |
| WAEMU | 3.00% (from 16 March 2026) | -0.8% (Q4 2025) | Not available | Credit to the economy 5.6% (2025) |
Source: South African Reserve Bank, Statement of the Monetary Policy Committee, January 2026, 29 January 2026; South African Reserve Bank, Prudential Authority, Selected South African banking sector trends, December 2025, 13 February 2026; Central Bank of Nigeria, Monetary Policy Committee decisions, 24 February 2026; Central Bank of Kenya, Monetary Policy Committee press release, meeting of 10 February 2026, 10 February 2026; Bank of Ghana, Monetary Policy Committee press release, 28 January 2026, 28 January 2026; Bank of Tanzania, Monetary Policy Committee Statement, MPC No. 240, 8 January 2026; Banco de Moçambique, Monetary Policy Committee Communiqué No. 1/2026, 28 January 2026; Banque Centrale des États de l'Afrique de l'Ouest (BCEAO), Réunion ordinaire du Comité de Politique Monétaire de la BCEAO tenue le 4 mars 2026, 4 March 2026.
Non-performing loan ratios, latest reading, %
Source: Bank of Ghana, Monetary Policy Committee press release, 28 January 2026, 28 January 2026; Central Bank of Kenya, Monetary Policy Committee press release, meeting of 10 February 2026, 10 February 2026; South African Reserve Bank, Prudential Authority, Selected South African banking sector trends, December 2025, 13 February 2026; Bank of Tanzania, Monetary Policy Committee Statement, MPC No. 240, 8 January 2026.
Asset quality divides the region into two groups. Ghana and Kenya combine falling policy rates with double-digit bad-loan ratios, while South Africa and Tanzania report ratios below 5%.
Outlook risks
The main regional risk is the link between banks and their sovereigns. In Mozambique, late servicing of domestic debt is already disrupting the government securities and interbank markets. In Ghana, the non-performing loan ratio remains elevated at 18.9% even though inflation has fallen to 5.4%. In Kenya, the test is whether the fall in the non-performing loan ratio to 15.5% continues as the new loan-pricing model takes effect. In South Africa, the SARB expects resilience to hold to November 2026, but banks expect margins to come under pressure from lower rates and credit losses to normalise. Standard Bank also flagged the conflict involving Iran as a source of uncertainty for trade, inflation and growth.
What to watch
- 18 March 2026: the Bank of Ghana announces the decision of its 16-18 March Monetary Policy Committee meeting.
- March 2026: Kenya's revised Risk-Based Credit Pricing Model is due to be fully operational.
- 30 March 2026: Banco de Moçambique's next Monetary Policy Committee meeting, after it signalled that the easing cycle is nearing its end.
- 2 April 2026: the Bank of Tanzania announces its Central Bank Rate for the second quarter, after its 1 April meeting.
- April 2026: the CBK's next Monetary Policy Committee meeting.
Primary sources: South African Reserve Bank, Statement of the Monetary Policy Committee, November 2025, 20 November 2025; Central Bank of Kenya, Monetary Policy Committee press release, meeting of 9 December 2025, 9 December 2025; Bank of Ghana, Monetary Policy Committee press release, 26 November 2025, 26 November 2025; Central Bank of Kenya, Monetary Policy Committee press release, meeting of 10 February 2026, 10 February 2026; Bank of Ghana, Monetary Policy Committee press release, 28 January 2026, 28 January 2026; Central Bank of Nigeria, Monetary Policy Committee decisions, 24 February 2026; South African Reserve Bank, Prudential Authority, Selected South African banking sector trends, December 2025, 13 February 2026; International Monetary Fund, Introductory Remarks at the IMF's African Department Press Briefing (October 2025 Regional Economic Outlook), 16 October 2025; Banco de Moçambique, Monetary Policy Committee Communiqué No. 1/2026, 28 January 2026; Bank of Tanzania, Monetary Policy Committee Statement, MPC No. 240, 8 January 2026; 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, 3 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 4 mars 2026, 4 March 2026; Standard Bank Group (exchange announcement on the Namibian Stock Exchange), Standard Bank Group results for the year ended 31 December 2025 and dividend declaration, 12 March 2026; South African Reserve Bank, Financial Stability Review, Second edition 2025, 30 November 2025; South African Reserve Bank, Statement of the Monetary Policy Committee, January 2026, 29 January 2026; FirstRand (exchange announcement on the Namibian Stock Exchange), Unaudited results and ordinary cash dividend declaration for the six months ended 31 December 2025, 5 March 2026; Nedbank Group, A transformational year as Nedbank positions for growth (results for the year ended 31 December 2025), 3 March 2026.