Banking Sector’s NPL Ratio Drops to 23.6% in April 2025, Says BoG
The Bank of Ghana (BoG) has reported a decline in the banking industry’s Non-Performing Loans (NPL) ratio to 23.6% in April 2025, down from 25.7% recorded in the same period last year.
According to the central bank’s May 2025 Banking Sector Development Report, the improvement in asset quality was primarily driven by a stronger growth in total credit relative to the growth in the stock of NPLs.
When adjusted for the fully provisioned loan loss category, the NPL ratio dropped further to 9.0% in April 2025, from 11.1% a year earlier—an indication of better loan provisioning and credit risk management by banks.
Total NPL stock rose by 8.7% year-on-year to GH¢21.7 billion in April 2025, compared to GH¢20.0 billion in April 2024. Despite the increase, the pace of expansion in total loans outstripped that of NPLs, accounting for the moderation in the overall ratio.
The BoG data showed that the private sector remained the primary contributor to the industry’s NPLs, in line with its dominant share in total credit. Private sector NPLs accounted for 93.4% of the total in April 2025, up from 91.0% in April 2024. Conversely, the public sector’s share of NPLs declined to 6.6%, from 9.0% in the corresponding period last year.
On a sectoral basis, the agriculture, forestry, and fishing sector recorded the highest NPL ratio at 62.1% in April 2025, up from 58.7% in April 2024. This was followed by the transport, storage, and communications sector, which saw its NPL ratio rise to 53.9% from 49.0% over the same period.
The construction sector, however, registered the most notable improvement in asset quality, with its NPL ratio dropping significantly from 41.3% in April 2024 to 30.3% in April 2025.
The mining and quarrying sector posted the lowest NPL ratio among the major sectors, improving from 14.4% to 9.8% year-on-year.
The decline in the industry’s headline NPL ratio suggests a gradual improvement in credit risk conditions, though the persistently high levels in certain sectors remain a source of concern for financial stability.
