- NPL Ratio Falls to 18.0% as Capital Adequacy Strengthens
Ghana’s banking sector recorded a gradual improvement in asset quality in April 2026, with the industry’s non-performing loan ratio declining to 18.0 per cent, from 23.6 per cent in April 2025, as stronger capital buffers, rising deposits and renewed credit growth pointed to a more resilient financial system.
According to the Bank of Ghana’s May 2026 Summary of Economic and Financial Data, the non-performing loans ratio fell steadily over the period, moving from 23.6 per cent in April and May 2025 to 18.9 per cent in December 2025, before easing further to 18.0 per cent in April 2026.
The decline suggests that banks are beginning to see some improvement in loan performance after a difficult period marked by high interest rates, debt restructuring effects, inflationary pressure and weak repayment capacity among some borrowers.
The improvement was even stronger when the loss category was excluded. NPLs excluding the loss category dropped from 9.0 per cent in April 2025 to 5.6 per cent in April 2026, indicating that the stock of less severe impaired loans has also moderated.
The asset-quality improvement came alongside a stronger aggregate balance sheet. Total banking-sector assets increased from GH¢390.1 billion in April 2025 to GH¢493.9 billion in April 2026, representing annual growth of 26.6 per cent.
Deposits also rose strongly, increasing from GH¢289.5 billion to GH¢365.5 billion over the same period, equivalent to annual growth of 26.2 per cent. This points to stronger liquidity mobilisation within the banking system and continued public reliance on banks as the main store of formal financial savings.
Total advances increased from GH¢92.2 billion in April 2025 to GH¢115.2 billion in April 2026, with annual growth accelerating to 25.0 per cent. The data suggest that lending activity is recovering as interest rates decline and macroeconomic stability improves.
However, the industry’s NPL ratio remains elevated by conventional banking standards. While the decline to 18.0 per cent is a positive signal, it still means that nearly one in every five cedis of bank loans is classified as non-performing.
Capital buffers, however, appear stronger. The sector’s capital adequacy ratio rose to 22.3 per cent in April 2026, compared with 17.5 per cent a year earlier. The ratio without regulatory reliefs was also 22.3 per cent, suggesting that the banking sector’s capital position has strengthened beyond temporary regulatory support.
Profitability remained positive but showed signs of softening. Return on assets before tax declined from 5.0 per cent in April 2025 to 4.3 per cent in April 2026, while return on equity after tax fell from 30.0 per cent to 22.4 per cent over the same period.
The moderation in returns may reflect falling interest rates, narrowing margins and the gradual adjustment of banks’ income models after a period in which high-yield government securities supported strong profitability.
Net interest margin declined from 14.0 per cent in April 2025 to 9.3 per cent in April 2026, reinforcing the view that banks are operating in a lower-yield environment. At the same time, operating cost to gross income rose from 49.9 per cent to 52.0 per cent, suggesting that cost efficiency remains a pressure point.
Liquidity remained broadly comfortable. Core liquid assets to total assets stood at 30.3 per cent in April 2026, while core liquid assets to short-term liabilities stood at 36.8 per cent. These ratios were lower than April 2025 levels but still suggest that banks retain sufficient liquidity buffers.
The banking-sector data, therefore, present a mixed but improving picture. Asset quality is getting better, capital adequacy is stronger, deposits are rising and credit growth is recovering. But NPLs remain high, profitability is easing and cost pressures are still visible.
For businesses, the improvement in bank balance sheets should matter if it translates into more credit at lower rates. Average lending rates fell to 16.33 per cent in April 2026, from 27.40 per cent a year earlier, creating room for stronger private-sector borrowing if banks become more confident about asset quality.
