Ghana’s banking sector has written off GH¢893 million in bad loans for the first half of 2025, representing a 14.8% decline compared to the same period last year. According to the Bank of Ghana’s July 2025 Domestic Money Banks Income Statement, the write-offs were attributed to improved asset quality and tighter credit risk management practices across the industry.
The banking sector’s non-performing loan (NPL) ratio declined to 23.1% in June 2025, down from 24.2% a year earlier. When fully provisioned loan losses are excluded, the adjusted NPL ratio stood at 8.5%, compared with 10.8% in June 2024. This improvement in asset quality is a positive sign for the sector’s stability.
Despite the decline in bad loan write-offs, the total NPL stock rose marginally by 1.3% to GH¢20.7 billion in June 2025, from GH¢20.4 billion in the same period of 2024. The private sector dominated the bad loan landscape, accounting for 96.4% of total non-performing loans.
Key Highlights:
– Non-Performing Loan Ratio: 23.1% in June 2025, down from 24.2% in June 2024
– Adjusted NPL Ratio: 8.5% when fully provisioned loan losses are excluded
– Private Sector’s Share of NPLs: 96.4%
– Total NPL Stock: GH¢20.7 billion in June 2025
The Bank of Ghana has introduced new regulations to strengthen the financial system’s stability, including a requirement for banks to cap their NPL ratios at 10% of gross loans by December 2026. This move is expected to further improve the sector’s asset quality and reduce the risk of default.