Banking Sector Bad Debt Write-Offs Surge 56.7% to GHS 1.39bn in 2025
Banks operating in Ghana wrote off a total of GHS 1.39 billion as bad debt in the first ten months of 2025, reflecting a sharp increase in loan clean-up activities across the sector.
Data from the Domestic Money Banks Income Statement show that the write-offs were 56.7% higher compared to the 10% increase recorded in October 2024, underscoring a more aggressive provisioning posture by banks during the period.
The provisions were largely driven by loan losses, depreciation and other related charges, as banks intensified efforts to strengthen balance sheets amid lingering credit risks.
Despite the elevated bad debt write-off, the banking industry’s asset quality improved markedly over the review period.
The sector’s non-performing loans (NPL) ratio declined to 19.5% in October 2025, from 22.7% in October 2024, reflecting an overall improvement in credit conditions. When adjusted for fully provisioned loan loss categories, the NPL ratio also improved significantly to 6.8% at end-October 2025, from 9.4% a year earlier.
According to the data, the improvement in asset quality was driven by a reduction in sub-standard loans, alongside changes in the composition of the NPL stock, with a higher share of loans classified as loss.
The decline in the NPL ratio was attributed to a contraction in the absolute stock of non-performing loans, coupled with a modest recovery in credit growth during the period.
The banking industry’s NPL stock fell by 6.2% to GHS 20.1 billion in October 2025, down from GHS 21.4 billion in October 2024.
This contraction, according to the data, reflects the combined effects of increased loan write-offs, improved repayments, and the appreciation of the Ghana cedi, which reduced the local currency value of some foreign currency-denominated exposures.
Overall, the figures suggest that while banks have incurred higher bad debt write-offs in 2025, these actions have contributed to a gradual improvement in the sector’s underlying asset quality.
