- UBA’s 2.1% NPL Ratio Contrasts with Severe Credit Stress at ADB and NIB
Ghana’s banking-sector recovery is becoming increasingly uneven, with UBA Ghana reporting the lowest ratio of bad loans among selected lenders while state-owned Agricultural Development Bank and National Investment Bank remain burdened by severely impaired credit portfolios.
UBA Ghana ended 2025 with a non-performing loan ratio of 2.1 per cent, according to the Ghana Association of Banks’ Consolidated Banks’ Audited Financial Statements for 2025.
Fidelity Bank Ghana followed with an NPL ratio of approximately 6.1 per cent, while Guaranty Trust Bank Ghana recorded 7.1 per cent. Zenith Bank Ghana and Access Bank Ghana closed the year at 8.5 per cent and 9.2 per cent, respectively.
The figures suggest that a group of banks entered 2026 with relatively healthy loan portfolios. They also expose a striking divergence in underwriting performance, loan recovery and legacy exposure across Ghana’s banking industry.
At the other end of the market, ADB recorded an NPL ratio of 70.5 per cent, while NIB ended the year at 69.7 per cent. These figures imply that roughly seven out of every 10 cedis in the affected loan portfolios were classified as non-performing.
Although ADB’s ratio improved from 75.3 per cent in 2024 and NIB’s declined from 75.5 per cent, the reductions do not alter the scale of the underlying credit problem.
Such high ratios can weaken earnings through impairment charges, consume regulatory capital and restrict the institutions’ capacity to provide new financing. They also raise broader governance questions about credit approval, concentration risk, recovery practices and the commercial mandates of state-controlled banks.
UBA’s 2.1 per cent ratio stands out not simply because it is the lowest among the banks highlighted, but because it is well below the levels recorded by several large competitors.
A low NPL ratio generally indicates that most borrowers are servicing their loans according to agreed terms. It can also suggest conservative underwriting, effective monitoring, stronger recovery processes or a loan book concentrated among comparatively creditworthy customers.
The ratio must nevertheless be interpreted alongside the bank’s loan growth, sector concentration, provisioning and collateral coverage. A bank can produce a low NPL ratio by lending conservatively, while another may accept greater risk in pursuit of faster credit expansion.
More importantly, a bank’s current position does not fully reveal the direction in which its asset quality is moving.
Access Bank, for example, remained below the 10 per cent threshold at the end of 2025, but its NPL ratio rose sharply from 2.1 per cent in 2024 to 9.2 per cent. Zenith Bank’s ratio increased from 1 per cent to 8.5 per cent, while GTBank’s climbed from 2.4 per cent to 7.1 per cent.
The three institutions were still among the better-performing banks on the headline measure. Yet the speed of the deterioration is significant.
Access Bank’s ratio increased by 7.1 percentage points, Zenith’s by 7.5 percentage points and GTBank’s by 4.7 percentage points within a year. Such movements could reflect new defaults, slower loan growth, the reclassification of previously restructured facilities or weaker repayment conditions among borrowers.
The figures illustrate why supervisors and investors must assess both the level and trajectory of bad loans. A bank with a moderate but declining ratio may be strengthening, while one with a lower but rapidly rising ratio could be approaching a more difficult phase.
CalBank recorded one of the strongest improvements, reducing its NPL ratio from 47.5 per cent in 2024 to 17 per cent in 2025.
The 30.5-percentage-point reduction represents meaningful balance-sheet repair and could reflect recoveries, write-offs, restructuring, portfolio growth or a combination of these factors.
However, a 17 per cent NPL ratio remains elevated and suggests that the bank’s asset-quality recovery is incomplete.
Prudential Bank also reduced its ratio, from 74 per cent to 57 per cent, while Universal Merchant Bank’s NPL ratio fell from 54.9 per cent to 52.3 per cent.
These improvements are directionally positive, but more than half of the relevant loan portfolios remained non-performing at the end of 2025. The institutions may therefore require continued recoveries, capital support and cautious lending to restore their balance sheets fully.
Prudential Bank has since secured a GH¢1.13bn strategic capital investment from Bloom Africa Holdings Ghana Limited. The injection should strengthen its capacity to absorb risk and support new business, but capital alone does not remove impaired assets. Sustainable recovery will depend on resolving legacy loans while ensuring that new lending does not reproduce the same problems.
Consolidated Bank Ghana recorded one of the most pronounced deteriorations, with its NPL ratio rising from 12.5 per cent in 2024 to 33.4 per cent in 2025.
The 20.9-percentage-point increase is particularly important because CBG was created from the consolidation of assets and liabilities associated with failed banks. A renewed build-up of impaired credit would therefore warrant scrutiny of how inherited and newly originated facilities are being managed.
Stanbic Bank Ghana’s NPL ratio also increased from 17.1 per cent to 24.6 per cent. Although considerably below the levels recorded by ADB, NIB and Prudential Bank, the deterioration indicates that asset-quality pressure is not confined to distressed or state-owned institutions.
The pattern across the industry suggests that Ghana’s macroeconomic recovery has yet to translate uniformly into improved borrower repayment.
Companies and households continue to face high operating costs, exchange-rate pressures and the after-effects of tight financial conditions. Some borrowers may therefore struggle even as headline inflation and interest rates improve.
ADB and NIB’s persistently high bad-loan ratios are more than individual bank problems. They have implications for public finances, development policy and confidence in state ownership.
Both institutions have historically carried mandates linked to sectors and projects that commercial banks may consider too risky. Development-oriented lending can be economically justified, particularly when it supports agriculture, industrialisation and long-term investment.
But a public-policy mandate cannot remove the need for credit discipline.
If development lending repeatedly produces unpaid loans, the cost is eventually transferred to taxpayers through recapitalisation, restructuring or foregone returns on state capital. The intended beneficiaries of development finance also lose access to fresh funding when a bank’s balance sheet becomes immobilised by bad assets.
The relevant distinction is therefore not between developmental and commercial lending. It is between well-designed risk-taking and credit allocation weakened by poor appraisal, political influence, concentration or ineffective recovery.
The declines in ADB and NIB’s ratios show some progress, but their starting positions remain severe enough to demand transparent recovery plans, stronger governance and clearly defined timelines.
The asset-quality debate is unfolding alongside a dispute over delays in transferring salary deductions collected to repay loans contracted by public-sector workers.
The Ghana Association of Banks has warned that lenders could suspend new loans to employees on the Controller and Accountant-General’s payroll if deducted amounts are not transferred promptly.
This creates an unusual credit risk. A worker may have sufficient income and the repayment may already have been deducted, yet the bank may not receive the funds on schedule because of an administrative delay.
If unresolved, the situation can distort arrears information, interrupt bank cash flows and potentially cause otherwise performing facilities to appear delinquent.
A suspension would protect banks from accumulating additional exposure, but it would also restrict access to credit for public-sector workers who have not personally defaulted.
The episode demonstrates that bank asset quality depends not only on borrower behaviour and underwriting. It is also influenced by the efficiency of public payment systems and the reliability of institutions acting as intermediaries.
The Bank of Ghana’s recent call for stronger credit-risk frameworks comes at a critical point.
Private-sector credit grew by 35.5 per cent in August 2026, compared with 13.3 per cent a year earlier. In real terms, lending expanded by 29 per cent as average lending rates declined and demand recovered.
The recovery is important for an economy in which businesses have long complained about restricted and expensive financing. But rapid loan growth can create future impairment if competitive pressure encourages banks to relax underwriting standards.
The central bank plans to issue a credit-risk management directive covering loan origination, administration, monitoring, measurement and recovery. That intervention recognises that reducing legacy NPLs is only half the challenge; banks must also prevent the current lending rebound from producing the next cycle of bad debts.
Ghana’s banking sector is therefore operating at a delicate point. Some institutions have clean portfolios and room to expand. Others are repairing their balance sheets, while a smaller group remains constrained by exceptionally high impairment.
UBA’s 2.1 per cent ratio shows that low bad-loan levels are achievable within the same economic environment in which ADB and NIB recorded ratios close to 70 per cent.
The contrast suggests that macroeconomic conditions alone cannot explain the divergence. Governance, borrower selection, portfolio concentration, recovery discipline and the quality of internal controls are equally important.
The industry’s next test will not simply be whether total credit grows. It will be whether banks can expand lending without allowing today’s recovery to become tomorrow’s impairment crisis.
