Banks recover as deposits rise, bad loans decline -

Ghana’s banking sector recorded a marked improvement in financial stability in 2025, driven by stronger capital positions, a reduction in non-performing loans, and sustained growth in deposits and lending activity.

According to the latest industry analysis by the Ghana Association of Banks, the Capital Adequacy Ratio (CAR) for the sector rose significantly from 14% to 17.5% in 2025, reflecting a stronger overall capital base across commercial banks.

The CAR is a key regulatory measure that assesses a bank’s financial strength by comparing its capital to its risk-weighted assets. It indicates the ability of banks to absorb potential losses and protect depositors during periods of financial stress. The increase therefore signals improved resilience within the banking system.

The improvement is particularly notable because it was achieved largely without reliance on temporary regulatory relief measures introduced during the economic crisis.

On a standalone basis, the CAR rose from 11.3% to 17.5%, indicating that banks are increasingly strengthening their capital positions through internal earnings and balance sheet improvements rather than external support or regulatory forbearance.

This development points to a gradual but steady recovery of the sector following recent macroeconomic challenges, including high inflation, debt restructuring pressures, and earlier deterioration in asset quality.

Non-performing loans decline

The sector also recorded notable progress in cleaning up loan portfolios. Non-performing loans (NPLs), which measure the share of loans that are in default or close to default, declined from 21.8% to 18.9%.

The improvement reflects stronger credit risk management practices, enhanced recovery efforts, and more cautious lending standards adopted by banks over the period.

More significantly, NPLs excluding fully impaired or loss-category loans dropped sharply from 8.5% to 5%, indicating a healthier underlying loan portfolio and improved credit quality across the banking industry.

Strong balance sheet expansion

The banking sector also recorded strong growth in key balance sheet indicators in 2025. Total assets increased by 21.5%, rising from ₵367.8 billion in 2024 to ₵446.9 billion in 2025.

Customer deposits grew by 17.8% to ₵325.3 billion, reflecting improved confidence in the banking system and sustained mobilisation of savings across the economy.

Loans and advances also increased by 16% to ₵111 billion, signalling a gradual return of credit extension to businesses and households as economic conditions stabilise.

The combined growth in deposits and lending suggests that banks are beginning to balance risk management with their traditional role of financial intermediation more effectively.

Sector outlook

Overall, the latest figures indicate that Ghana’s banking sector is steadily transitioning from a period of economic stress into a more stable and structured recovery phase. The gains in capital adequacy, improvement in asset quality, and expansion in balance sheet size point to a sector that is increasingly resilient and better positioned to support economic activity.

While challenges remain in credit risk management and economic recovery, the trajectory suggests that banks are strengthening their foundations and restoring confidence within the financial system.