Analyzing the Impact of Loan Portfolio Management on the Financial Performance of Publicly Traded Banks in GhanaBottom of Form

Abstract

The banking sector is pivotal for economic growth and development, primarily through its roles in financial intermediation, providing an efficient payment system, and supporting monetary policy execution. Over the past decade, the performance and profitability of Ghanaian banks have significantly improved. This study aimed to bridge the knowledge gap by examining the factors influencing the performance of commercial banks in Ghana. Key factors analyzed included loan portfolio management, interest expenses, administrative costs, and asset values. A descriptive survey design was utilized, focusing on management employees from commercial banks in Ghana. The sample was selected using both stratified and simple random sampling techniques, and data were collected through self-administered questionnaires. The Statistical Package for the Social Sciences (SPSS) was employed for analyzing primary data, while secondary data were sourced directly from the banks. The study revealed that fluctuations in interest margins had minimal impact on the profitability of both public and private sector banks, indicating that their profitability growth is relatively independent of interest rate changes. However, foreign banks benefited from higher returns due to these interest margin fluctuations.