Banking Industry Recovery Gains Momentum as Deposits Rise and Bad Loans Decline
Ghana’s banking sector is showing renewed signs of resilience, with stronger capital buffers, rising customer deposits and a sharp decline in bad loans pointing to a broader recovery after years of economic turbulence.
New industry figures released by the Ghana Association of Banks indicate that the sector closed 2025 in a significantly stronger financial position, reflecting improving confidence among depositors and more disciplined risk management by lenders.
The industry’s Capital Adequacy Ratio (CAR) a key measure of financial strength rose from 14 per cent in 2024 to 17.5 per cent in 2025, comfortably above regulatory thresholds. More significantly, CAR excluding temporary regulatory relief measures climbed from 11.3 per cent to 17.5 per cent, suggesting banks are increasingly relying on genuine balance-sheet improvements rather than crisis-era support mechanisms.
The improvement comes as banks continue to repair loan books damaged during Ghana’s recent inflation surge, debt restructuring programme and broader macroeconomic instability.
Non-performing loans declined from 21.8 per cent to 18.9 per cent over the period under review, while impaired loans excluding fully classified loss-category facilities dropped sharply from 8.5 per cent to 5 per cent. The decline signals tighter credit controls, improved recoveries and stronger underwriting standards across the sector.
Balance-sheet expansion also accelerated during the year.
Total banking sector assets rose by 21.5 per cent to GH¢446.9bn, up from GH¢367.8bn in 2024, while deposits climbed 17.8 per cent to GH¢325.3bn. Total loans and advances increased by 16 per cent to GH¢111bn, indicating a gradual return of credit support to businesses and households.
The recovery in deposits is particularly significant for policymakers and investors, as it reflects improving public confidence in the financial system following years of banking sector stress and restructuring.
The stronger banking performance also comes against the backdrop of easing monetary conditions and declining Treasury bill yields, which have altered liquidity dynamics within the financial system. The government raised approximately GH¢120.2bn from the Treasury bill market between January and April 2026, although investor demand softened in recent weeks as yields compressed sharply.
At the same time, analysts expect the Bank of Ghana to adopt a more cautious monetary policy stance after inflation recorded its first increase in more than a year, potentially slowing the pace of future interest-rate cuts.
Taken together, the latest indicators suggest Ghana’s banking sector is gradually moving beyond crisis management into a phase of consolidation and recovery, supported by stronger capital positions, healthier loan portfolios and improving depositor confidence.
