Ghana’s banking sector is beginning 2026 from a position that looks stronger, larger and more stable than it did a year ago. The latest Bank of Ghana data show a banking system still expanding on its balance sheet, still attracting deposits, still growing credit and still generating robust returns, even as the clean-up of loan books remains incomplete. That matters not only for investors and regulators, but also for ordinary depositors, borrowers and businesses trying to judge whether the financial system is healthy enough to support the next phase of economic growth.
At the broadest level, the system is simply bigger. Total banking sector assets rose to GH¢465.4bn in February 2026, from GH¢384.7bn a year earlier, representing 21.0 per cent annual growth. Total deposits climbed to GH¢338.5bn, up from GH¢286.9bn, while total advances reached GH¢108.2bn, compared with GH¢93.8bn in February 2025. In plain terms, banks are holding more assets, mobilising more customer funds and extending more credit than they were a year ago.
That is usually the first sign readers should watch for in a banking system recovery. Deposit growth tells you whether customers still trust banks enough to keep money there. Credit growth tells you whether banks are willing to take risk and lend into the economy. On both counts, the February data are constructive. Deposit growth stood at 18.0 per cent year-on-year, while advances grew by 15.4 per cent. Private sector credit in the monetary data also remained firm, with nominal private sector credit up 18.7 per cent year-on-year and real private sector credit up 15.3 per cent, suggesting lending growth is now outpacing inflation in real terms.
The capital position is also looking firmer. The capital adequacy ratio improved to 18.6 per cent in February 2026, up from 14.4 per cent a year earlier. More notably, the ratio was also 18.6 per cent even without regulatory reliefs, compared with 12.1 per cent in February 2025. That is an important distinction. It suggests the sector’s solvency is no longer being flattered mainly by temporary policy cushions; underlying capital buffers appear to have improved materially.
“The stronger reading on capital adequacy suggests Ghana’s banks are relying less on reliefs and more on genuine balance-sheet repair.”
For businesses and households, that matters because a better-capitalised banking system is generally a more confident lender. Banks with stronger capital cushions are in a better position to absorb shocks, extend credit and withstand pressure from loan impairments. It also strengthens depositor confidence at a time when the public remains sensitive to signs of weakness in financial institutions.
Yet this is not a clean story of strength without strain. The main blemish remains asset quality.
The non-performing loan ratio rose to 18.7 per cent in February 2026, from 17.9 per cent in January, though it remains below the 22.6 per cent recorded a year earlier. Excluding the loss category, the NPL ratio stood at 5.4 per cent, up from 4.8 per cent in January but sharply lower than 8.9 per cent a year earlier. The February uptick is not catastrophic, but it is a reminder that the banking sector is still carrying legacy credit stress even as the broader macro environment improves.
That tension is visible in profitability and efficiency metrics as well. Banks remain profitable, but margins are narrowing as interest rates fall. Return on assets before tax eased to 4.6 per cent in February, from 5.0 per cent in January and 4.7 per cent a year earlier. Return on equity after tax declined more sharply to 24.3 per cent, from 28.3 per cent in January and 28.5 per cent a year earlier. Meanwhile, the net interest margin narrowed to 10.3 per cent, down from 11.0 per cent in January and 14.3 per cent in February 2025.
This is the trade-off now confronting the sector. Falling interest rates are good for borrowers and supportive of economic activity, but they can compress the spread banks earn between funding costs and loan pricing. The Bank of Ghana’s rates data show the average lending rate dropping to 19.17 per cent in February 2026 from 30.12 per cent a year earlier, while the Ghana Reference Rate fell to 14.58 per cent from 29.96 per cent. For customers, that is relief. For banks, it means future profitability will depend more on volume growth, cost discipline and loan quality than on exceptionally wide pricing spreads.
Management efficiency remains mixed. Total cost to gross income improved to 73.8 per cent in February from 76.7 per cent a year earlier, although it worsened from 71.2 per cent in January. Operational cost to gross income also rose to 50.1 per cent from 47.0 per cent in January, suggesting the sector has not yet locked in a stable downward cost trend.
Liquidity, however, remains reasonably supportive. Core liquid assets to total assets stood at 30.3 per cent in February, up from 28.6 per cent in January, while core liquid assets to short-term liabilities improved to 37.0 per cent from 35.0 per cent. These are useful comfort indicators for depositors and counterparties: they suggest banks still hold a meaningful cushion of readily available assets against near-term obligations.
For depositors, the message is reassuring: the banking system looks better capitalised, liquid and institutionally sturdier than it did a year ago. For borrowers, the message is more nuanced: banks are healthier and rates are falling, which should improve credit conditions, but lenders will remain selective because bad-loan risks have not disappeared. For businesses, especially small and medium-sized firms, the implication is that credit availability may improve further in 2026, but the quality of a borrower’s balance sheet will matter more than ever.
The broader takeaway is that Ghana’s banks are no longer merely surviving the post-crisis period. They are adjusting to a new environment of lower rates, stronger capital and renewed credit growth. But until bad loans fall more decisively and earnings become less dependent on high spreads, the sector’s recovery will remain solid rather than complete.
