Ghana’s banking sector is experiencing mixed progress in managing non-performing loans (NPLs), with some financial institutions maintaining relatively healthy loan portfolios while others continue to struggle with high levels of bad debt and credit risk.
According to the Ghana Association of Banks’ Consolidated Banks’ Audited Financial Statements for 2025, UBA Ghana recorded the lowest non-performing loan ratio among the banks highlighted, at 2.1% as of December 2025. Fidelity Bank Ghana followed with approximately 6.1%, while Guaranty Trust Bank (GT Bank) Ghana recorded 7.1%.
Zenith Bank Ghana and Access Bank Ghana also maintained NPL ratios below 10%, ending 2025 at 8.5% and 9.2%, respectively. These figures indicate relatively stronger loan portfolio performance compared with institutions facing more serious challenges in recovering outstanding loans.
However, the overall performance of Ghana’s banking industry reveals significant differences in asset quality, with some banks experiencing sharp increases in bad loans despite maintaining comparatively low non-performing loan ratios.
Access Bank, Zenith Bank and GT Bank Record Rising Bad Loans
Access Bank Ghana experienced a substantial increase in its NPL ratio, rising from 2.1% in 2024 to 9.2% in 2025. Zenith Bank Ghana also recorded an increase from 1.0% to 8.5% over the same period.
Similarly, GT Bank Ghana’s non-performing loan ratio climbed from 2.4% in 2024 to 7.1% in 2025.
Although these banks remained among the institutions with relatively low NPL ratios at the end of the reporting period, the year-on-year increases suggest growing pressure on loan repayment performance.
A low NPL ratio generally indicates that a smaller proportion of a bank’s loans are classified as non-performing. However, a sharp increase in the ratio can signal emerging credit risks, making effective loan monitoring and debt recovery increasingly important.
CalBank and Prudential Bank Improve Loan Portfolio Quality
CalBank recorded one of the most significant improvements in asset quality among the banks assessed. Its non-performing loan ratio declined from 47.5% in 2024 to 17.0% in 2025.
Prudential Bank also made progress, reducing its NPL ratio from 74.0% to 57.0% over the same period.
The reductions suggest that both banks made progress in addressing impaired loans and improving their loan portfolio performance. Nevertheless, their NPL ratios remained elevated at the end of 2025, highlighting the need for continued efforts to strengthen credit risk management and recover outstanding debts.
ADB and NIB Record Some of Ghana’s Highest NPL Ratios
Agricultural Development Bank (ADB) and National Investment Bank (NIB) continued to face significant bad debt challenges in 2025, recording non-performing loan ratios of 70.5% and 69.7%, respectively.
ADB’s NPL ratio declined from 75.3% in 2024, while NIB recorded a reduction from 75.5% over the same period.
Despite the improvements, non-performing loans still accounted for a substantial share of the two banks’ loan portfolios, reflecting persistent difficulties in recovering credit and managing loan defaults.
Universal Merchant Bank (UMB) also remained under pressure, although its NPL ratio improved slightly from 54.9% in 2024 to 52.3% in 2025.
These figures highlight the continuing challenges facing some Ghanaian banks as they work to reduce bad loans, strengthen their balance sheets and improve financial performance.
Consolidated Bank Ghana and Stanbic Bank Ghana Experience Deterioration
While some financial institutions recorded improvements, others experienced a deterioration in loan portfolio quality.
Consolidated Bank Ghana’s NPL ratio increased sharply from 12.5% in 2024 to 33.4% in 2025. Stanbic Bank Ghana also recorded a rise, with its ratio climbing from 17.1% to 24.6%.
The increases point to growing credit impairment concerns and reinforce the need for stronger loan assessment procedures, borrower monitoring and debt recovery strategies.
The contrasting performance across the banking industry suggests that the recovery in asset quality remains uneven, with individual banks experiencing different levels of credit risk.
How High Non-Performing Loans Affect Ghana’s Banking Industry
High non-performing loan ratios can have serious implications for banks’ profitability, capital strength and lending capacity.
When borrowers fail to repay loans as agreed, financial institutions may be required to increase loan-loss provisions and impairment charges. These expenses can reduce profits and place additional pressure on capital reserves.
High levels of bad debt can also restrict the availability of fresh credit to businesses and households. This may affect small and medium-sized enterprises (SMEs), private-sector investment, job creation and economic growth.
Banks with substantial impaired loans may also face difficulties in maintaining a healthy balance between lending activities, liquidity management and capital requirements.
However, non-performing loan ratios should not be used as the sole measure of a bank’s financial health. Other important indicators include capital adequacy, liquidity, profitability, loan-loss provisions and the extent to which outstanding debts are secured by collateral.
Salary Deduction Delays Raise Concerns Over Public Sector Lending
The latest asset-quality figures come amid concerns raised by the Ghana Association of Banks over delays in remitting salary deductions intended to repay loans obtained by public sector workers.
The association’s Chief Executive Officer, John Awuah, has indicated that banks could suspend new lending to public sector employees in the coming weeks if outstanding remittances are not resolved.
The proposed measure is aimed at addressing financial risks associated with delays in transferring loan repayments already deducted from workers’ salaries.
Salary-backed loans are an important source of financing for many public sector employees, allowing them to meet personal expenses, household obligations and other financial commitments.
When employers or responsible institutions fail to transfer deducted repayments to banks promptly, lenders may experience cash-flow disruptions and difficulties in managing loan accounts. Such delays can also complicate repayment schedules and contribute to credit impairment.
If banks proceed with suspending new loans to public sector workers, affected employees could face reduced access to personal financing and other credit facilities.
The situation underscores the importance of effective coordination among government agencies, employers and financial institutions to ensure that salary deductions are transferred to banks on time.
Stronger Credit Risk Management Needed in Ghana
The combination of high non-performing loan ratios at some banks and concerns over delayed salary loan repayments highlights the importance of strengthening credit risk management across Ghana’s financial sector.
Banks may need to intensify loan recovery efforts, improve credit assessment systems, monitor borrowers more closely and strengthen internal controls to minimise the risk of further loan defaults.
Effective debt recovery mechanisms and timely repayment transfers are also essential to maintaining confidence in Ghana’s banking industry and ensuring that financial institutions can continue providing credit to businesses and individuals.
Overall, the 2025 audited financial results show that Ghana’s banking sector has made uneven progress in reducing non-performing loans. While UBA Ghana, Fidelity Bank Ghana, GT Bank Ghana, Zenith Bank Ghana and Access Bank Ghana recorded comparatively low NPL ratios, institutions such as ADB, NIB, Prudential Bank and Universal Merchant Bank continued to face substantial bad debt challenges.
As the industry moves through 2026, the ability of banks to improve asset quality, recover impaired loans and maintain adequate capital and liquidity will remain important to financial stability and sustainable lending growth.
Source: newsthemegh.com