- Non-Performing Loans to Drop Further as New Guidelines Take Effect
The Bank of Ghana expects non-performing loans in the banking sector to decline further as new regulatory and prudential guidelines begin to take effect, Governor Dr Johnson Pandit Asiama has said, signalling the central bank’s continued focus on asset quality, liquidity discipline and financial-sector stability.
Speaking after the conclusion of the 130th Monetary Policy Committee meeting in Accra, Dr Asiama said recent supervisory interventions and tighter regulatory measures were already helping to strengthen credit administration and improve bank balance sheets.
“We expect that the non-performing loans ratio will go down further for commercial banks due to some of the guidelines that have been put in place,” he said.
The Governor pointed out to journalists that the banking sector remained “broadly stable, well-capitalised and liquid” despite the pressures experienced in recent years, adding that the Bank of Ghana would continue to strengthen supervision and ensure full compliance with the regulatory framework.
The latest Bank of Ghana data show that the industry’s non-performing loans ratio declined to 18.0 per cent in April 2026, from 23.6 per cent in April 2025, pointing to gradual improvement in asset quality across the sector. Excluding the loss category, NPLs fell to 5.6 per cent, from 9.0 per cent a year earlier.
The decline comes amid a broader recovery in banking-sector indicators. Total banking-sector assets rose to GH¢493.9 billion in April 2026, from GH¢390.1 billion a year earlier, while deposits increased to GH¢365.5 billion, from GH¢289.5 billion. Total advances also grew to GH¢115.2 billion, representing annual growth of 25.0 per cent.
Capital buffers have also strengthened. The sector’s capital adequacy ratio rose to 22.3 per cent in April 2026, compared with 17.5 per cent in April 2025, suggesting that banks are better positioned to absorb credit shocks and support lending.
The Governor’s comments suggest the central bank expects tighter risk-management practices, improved credit underwriting and enhanced supervision to drive a further reduction in bad loans over the coming months.
This comes after the Governor disclosed that the Committee decided to amend the dynamic Cash Reserve Ratio to a uniform ratio of 20 per cent, to be maintained in domestic currency, effective June 4, 2026.
The change is significant because the Cash Reserve Ratio determines the proportion of banks’ deposits that must be held with the central bank. A uniform 20 per cent requirement is expected to simplify the reserve framework, improve predictability for banks and support more effective liquidity management across the financial system.
The measure also comes at a time when interest rates have fallen sharply. The policy rate stood at 14.0 per cent in April 2026, down from 28.0 per cent a year earlier, while the average lending rate declined to 16.33 per cent, from 27.40 per cent. The 91-day Treasury bill rate also fell to 4.90 per cent, from 15.47 per cent over the same period.
For banks, the new reserve requirement may require careful balance-sheet adjustment, particularly in how they manage liquidity, deposit mobilisation and lending growth. For the central bank, however, the uniform CRR provides an additional tool to manage liquidity conditions while preserving financial stability.
The policy shift also comes as private-sector credit is recovering. Nominal private-sector credit grew by 28.7 per cent year-on-year in April 2026, while real private-sector credit expanded by 24.5 per cent, suggesting that lower inflation and declining rates are beginning to improve credit conditions.
The challenge for the Bank of Ghana will be to ensure that stronger liquidity control does not slow the recovery in credit to businesses, especially at a time when industry is looking for cheaper and more accessible financing.
For commercial banks, the message from the central bank is clear: balance-sheet expansion must be supported by stronger credit discipline. The sector is healthier than it was a year ago, but the NPL ratio remains high by conventional standards, meaning the recovery in asset quality is not yet complete.
The next phase of banking-sector performance will therefore depend on whether banks can reduce bad loans further while expanding credit responsibly in a lower interest-rate environment.
