Banks Write off GHS 893m in Bad Loans for First Half of 2025
Ghana’s banking sector wrote off GHS 893 million in the first half of 2025, representing a 14.8% decline compared with the same period last year, according to the Bank of Ghana’s July 2025 Domestic Money Banks Income Statement.
The write-offs, which covered loan losses, depreciation, and other provisions, were lower than the GHS 1.05 billion recorded in the first half of 2024. The central bank attributed the reduction to improvements in asset quality and tighter credit risk management practices across the industry.
The data showed that the industry’s non-performing loans (NPL) ratio declined to 23.1% in June 2025, down from 24.2% a year earlier. When fully provisioned loan losses are excluded, the adjusted NPL ratio stood at 8.5%, compared with 10.8% in June 2024, reflecting a lower stock of sub-standard loans.
According to the central bank, the moderation in the NPL ratio was driven by slower growth in impaired loans relative to total advances. The total NPL stock rose marginally by 1.3% to GHS 20.7 billion in June 2025, from GHS 20.4 billion in the same period of 2024, despite a decline in the share of foreign currency-denominated NPLs.
The private sector continued to dominate the loan book and accounted for the bulk of bad loans. The proportion of NPLs attributed to the private sector edged up to 96.4% in June 2025, from 95.6% a year earlier, while the public sector’s share eased to 3.6%.
By sectoral classification, the commerce and finance sector, as well as agriculture, forestry, and fishing, recorded increases in their NPL ratios during the review period. In contrast, the manufacturing sector’s NPL ratio remained unchanged from June 2024 levels.
Analysts note that while the gradual decline in bad loan ratios signals improving credit quality, elevated NPL levels remain a key concern for profitability and capital adequacy. The banking sector continues to recover from the aftershocks of the Domestic Debt Exchange Programme (DDEP), which eroded capital buffers in 2023.
