Banks slash NPL ratio as bad loans hit GH₵21.7bn
Ghana’s banking sector saw its non-performing loan (NPL) ratio improve in April 2025, falling to 23.6% from 25.7% in April 2024, the Bank of Ghana has reported. However, the total value of bad loans edged up by 8.7%, climbing from GH₵20.0 billion to GH₵21.7 billion over the same period.
The decline in the NPL ratio reflects broader loan growth: as banks extended more credit, especially to businesses navigating inflationary pressures and high interest rates, non-performing exposures increased in absolute terms even as they represented a smaller share of the overall loan book.
Despite this mixed outcome, the sector remained profitable and resilient. According to the central bank’s April banking sector report, industry profits reached GH₵4.3 billion, up 22.0% year-on-year, underpinned by diversified income streams and prudent risk management. Net interest income grew by 15.5% to GH₵9.2 billion, while fee and commission income surged by over 26% to GH₵2.0 billion, compensating for tighter lending margins.
Commercial banks have stepped up provisions for credit losses, increasing their coverage ratios to bolster balance-sheet strength. Nonetheless, elevated NPL levels continue to weigh on lending costs and credit availability, particularly for small and medium-sized enterprises.
The Bank of Ghana has reiterated its commitment to restoring asset quality—calling on banks to enforce stricter underwriting standards, accelerate recoveries, and deepen credit-risk assessment practices. As the economy stabilizes, reducing the stock of non-performing loans remains critical to supporting sustainable growth and ensuring that credit flows efficiently to productive sectors.
By: Patrick Teye
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