Bayport Savings and Loans has reported a 98.3 percent surge in nine month profits, reaching GH¢44.6 million for the period ended September 30, 2025, cementing the microfinance institution’s position as one of Ghana’s fastest growing financial services providers. The dramatic earnings increase reflects successful deposit mobilization strategies and aggressive loan portfolio expansion across the institution’s 44 branch network.
The results represent a remarkable acceleration from the company’s already impressive first half performance. While Bayport reported GH¢26.5 million in half year profits through June 2025, the addition of third quarter results brought total nine month earnings to GH¢44.6 million, compared to just GH¢22.5 million for the same period in 2024.
Customer deposits surged to GH¢807.5 million by September end, representing a massive 159.7 percent increase from September 2024’s GH¢310.9 million. This extraordinary deposit growth provided the fuel for expanding Bayport’s core lending business, with loans and advances to customers climbing 26.5 percent to GH¢1.21 billion from GH¢959.8 million a year earlier.
Total assets grew to GH¢1.66 billion from GH¢1.23 billion, a 35.3 percent year on year increase that demonstrates how quickly Bayport is scaling its operations. The institution’s balance sheet expansion positions it among the most dynamic players in Ghana’s savings and loans sector, where many competitors struggle to attract deposits in meaningful volumes.
Net interest income, the difference between what Bayport earns on loans and pays on deposits, reached GH¢183.1 million for the nine months, up 43.3 percent from GH¢127.8 million the previous year. This core profitability metric shows that deposit growth hasn’t come at the expense of margins, a concern that often accompanies aggressive deposit gathering campaigns when institutions overpay for funds.
However, the path to profitability wasn’t without challenges. Net fees and commission expenses ballooned to GH¢28.7 million from GH¢23.7 million, reflecting higher transaction costs associated with the expanded business volumes. Additionally, net impairment losses on financial assets increased to GH¢18.6 million from GH¢11.7 million, suggesting that rapid loan growth has brought corresponding credit risk management requirements.
The non-performing loan ratio improved slightly to 12.5 percent from 14.3 percent a year earlier, indicating that asset quality challenges persist even as the portfolio expands. For context, a 12.5 percent NPL ratio means roughly one in eight loans faces repayment difficulties, a level that requires vigilant collection efforts and adequate provisioning to prevent future losses.
Operating expenses naturally increased alongside business growth. Personnel costs rose to GH¢32 million from GH¢25 million, while other operating expenses climbed to GH¢42.1 million from GH¢36.4 million. These cost increases, while substantial in absolute terms, grew more slowly than revenues, allowing profit margins to expand.
Bayport’s capital position strengthened significantly during the nine month period. Total equity reached GH¢282.2 million compared to GH¢239.3 million at September 2024, bolstered by retained earnings and a GH¢20 million transfer from income surplus to share capital. This capital increase raised stated share capital to GH¢50 million from GH¢29.9 million, demonstrating management’s commitment to strengthening the institution’s financial foundation.
The capital adequacy ratio stood at 12.5 percent at September end, slightly below the 13.9 percent recorded a year earlier. While this represents a modest decline, it remains above Bank of Ghana’s minimum requirements for savings and loans companies. The ratio’s decrease reflects the mathematical reality that rapid asset growth consumes capital unless equity expands proportionally.
Bayport’s funding mix shows interesting dynamics. While customer deposits surged dramatically, borrowings actually declined to GH¢464.3 million from GH¢521.4 million, and loans from shareholders fell to GH¢58.9 million from GH¢100.4 million. This shift represents a fundamental transformation in Bayport’s funding model, moving from reliance on wholesale funding toward retail deposits as the primary funding source.
The strategic implications are significant. Deposit funded growth tends to be more stable and cost effective than borrowing dependent expansion. Depositors seeking savings vehicles typically maintain longer term relationships than wholesale funders who may withdraw suddenly during market stress. Bayport’s success in attracting retail deposits reduces vulnerability to funding shocks while improving net interest margins.
Cash flow statements reveal how Bayport generated and deployed resources during the nine months. Operating activities produced GH¢453.1 million in net cash, driven primarily by the massive deposit inflow. However, the company deployed GH¢259.6 million into new loan originations, demonstrating the capital intensive nature of expanding a lending business.
Financing activities consumed GH¢216.8 million as Bayport repaid GH¢212.6 million in borrowings and GH¢53.8 million in shareholder loans. These repayments underscore the institution’s deliberate strategy to reduce dependence on borrowed funds now that deposit mobilization has proven successful.
The microfinance institution operates from one head office, ten service centers, and thirty three agency offices scattered across Ghana. This physical footprint enables Bayport to reach underserved communities where traditional banks maintain limited presence, serving government workers, small business owners, and salaried employees seeking access to credit.
Bayport’s business model focuses heavily on payroll lending, where loan repayments are deducted directly from borrowers’ salaries before they receive funds. This approach significantly reduces default risk compared to unsecured consumer lending, though it requires maintaining relationships with employers willing to facilitate the deduction arrangements.
The institution’s digital infrastructure investments appear to be paying dividends. Intangible assets, primarily software and systems, stood at GH¢7.7 million compared to GH¢7.6 million a year earlier. While the absolute increase seems modest, these technology investments enable efficient processing of the high transaction volumes that rapid growth demands.
Interest and similar income totaled GH¢368.7 million for the nine months, up 20.6 percent from GH¢305.7 million. However, interest expense simultaneously increased to GH¢185.6 million from GH¢177.9 million, as Bayport paid more to attract the deposits fueling its expansion. The net result still favored profitability, but the narrowing spread between interest earned and paid deserves monitoring.
Looking ahead, Bayport faces the perpetual challenge confronting fast growing financial institutions. Can the company maintain asset quality while pursuing aggressive growth? The 12.5 percent non-performing loan ratio, while improved from last year, still indicates meaningful credit risk. Rapid origination growth sometimes masks emerging problems that only become apparent when borrowers who received loans in the expansion phase begin experiencing repayment difficulties.
Management’s track record through the first nine months suggests competent execution of the growth strategy. Bayport has successfully attracted deposits without paying unsustainable rates, expanded lending while marginally improving asset quality, and strengthened capital through retained earnings. These accomplishments provide confidence that the institution understands the risks inherent in rapid expansion.
The regulatory environment also bears watching. Bank of Ghana has demonstrated willingness to intervene forcefully when savings and loans companies face difficulties, as seen in the sector cleanup that began several years ago. Bayport’s maintenance of required capital ratios and absence of liquidity defaults indicates compliance with regulatory expectations, but supervisory standards can change as circumstances evolve.
For Ghana’s broader financial sector, Bayport’s success story illustrates opportunities still available in microfinance and payroll lending segments. While commercial banks dominate corporate banking and wealthier retail clients, savings and loans companies like Bayport serve markets that traditional banks often overlook. The institution’s 98 percent profit growth demonstrates that serving these segments profitably remains possible with appropriate business models.
Shareholders have seen their equity stake appreciate substantially. Total equity of GH¢282.2 million at September 2025 compares favorably to GH¢216.8 million at the start of the year, representing a 30 percent increase in shareholder value over just nine months. Return on equity exceeded 32 percent on an annualized basis, far surpassing what most financial institutions achieve.
As 2025’s fourth quarter unfolds, investors and regulators will watch whether Bayport can maintain momentum. The institution has proven its ability to attract deposits and deploy them profitably. Now the test becomes whether this growth proves sustainable or whether rapid expansion has planted seeds of future credit problems that could undermine today’s impressive results.
Source: newsghana.com.gh
