Ghana’s banking sector sees improvement in asset quality

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LAGOS – The quality of assets in Ghana’s banking sector continued to improve in August, with the non-performing loan (NPL) ratio falling to 15.7% from 20.8% a year earlier, according to data from the Bank of Ghana.

The decline of 5.1 percentage points represents a reduction of about 24.5% in relative terms, signalling a significant improvement in the quality of banks’ loan portfolios.

The improvement came alongside gains in other indicators of banking-sector resilience. The capital adequacy ratio rose to 19.1% in August 2026, from 18.3% a year earlier, while total banking-sector assets increased by 20.5% to GH¢500.2 billion.

Despite the improvement, the central bank said credit risk remains elevated, highlighting the need for banks to continue strengthening credit-risk management and reducing problem loans.

The decline in the NPL ratio does not necessarily mean that all banks have experienced an improvement in their financial position. Rather, it indicates that the proportion of loans classified as non-performing has fallen across the banking system.

The Bank of Ghana has set a target of reducing the NPL ratio to 10% or below by December 2026, as part of efforts to improve asset quality and strengthen financial-sector stability.

The latest figures therefore point to a marked improvement in the quality of bank lending, while the continued level of non-performing loans underscores the need for further measures to contain credit risk and strengthen borrowers’ repayment capacity.