Banking Industry’s NPL Ratio Rises to 21.8% in December 2024
The Non-Performing Loans (NPL) ratio in Ghana’s banking sector increased to 21.8% in December 2024, compared to 20.6% in December 2023, according to the Bank of Ghana (BoG).
The central bank noted that elevated credit risk remains a key challenge for the sector, posing an upside risk to its stability.
Despite this, the banking industry continued to exhibit resilience, bolstered by improved domestic macroeconomic conditions.
Banking Sector Strength
The BoG’s latest Monetary Policy Report highlighted that the banking sector remains profitable, well-capitalized, and liquid.
Total assets of the sector grew significantly by 33.8% in 2024. Additionally, the Capital Adequacy Ratio (CAR), inclusive of regulatory reliefs, improved slightly to 14.0% in December 2024, compared to 13.9% in December 2023.
Excluding reliefs, the CAR saw a more substantial rise to 11.3%, up from 8.3% in the prior year.
Profitability Trends
The banking sector recorded higher profits in 2024 compared to 2023. However, the growth rate of profits slowed, resulting in a moderation of key profitability indicators during the year.
While the sector continues to navigate challenges such as rising credit risks, it remains robust, with strong fundamentals underpinned by favorable economic conditions.
