The banking sector in Ghana continues to grapple with a high level of non-performing loans (NPLs), with the latest data from the Bank of Ghana showing a slight uptick in April 2025.
According to the Central Bank’s May 2025 economic and financial data summary, the NPL ratio rose marginally to 23.6% in April, up from 23.4% in March. This marks a continued upward trend from the beginning of the year, when the NPL ratio stood at 21.8% in both December 2024 and January 2025.
Excluding loans classified under the “loss” category, the NPL ratio was significantly lower at 9.0%, indicating that a substantial portion of the distressed loan portfolio has already been recognized as impaired and provisioned against.
The high NPL ratio remains a critical concern for regulators and stakeholders, as it signals ongoing asset quality challenges despite overall balance sheet growth. Total advances in the sector stood at GH¢92.2 billion in April 2025, representing an 18.3% year-on-year increase. However, this growth in credit has not translated into improved asset performance.
The capital adequacy ratio, a key measure of financial soundness, improved to 17.5% in April, from 17.1% the previous month, supported by regulatory reliefs. Without these reliefs, the capital adequacy ratio stood at 15.8%.
Industry analysts point to the lingering effects of the post-COVID credit restructuring and macroeconomic volatility as key contributors to the persistently high NPL levels. While some improvement was seen in the latter half of 2024, the recent data suggests a plateau or reversal in gains.
Going forward, analysts suggest enhanced risk management practices and strengthened credit underwriting standards will be crucial to mitigating further asset quality deterioration.
