Ghana Banks Write Off GH¢1.64bn in 2025 as Bad Debt Drops 57%, NPL Ratio Improves

Banks in Ghana wrote off GH¢1.64 billion in bad debts in 2025, representing a sharp 57.1 percent decline compared to the previous year, according to data released by the Bank of Ghana.

Figures from the central bank’s Domestic Money Banks Income Statement show that in 2024, banks made provisions amounting to GH¢3.82 billion for bad loans, depreciation and other related losses. The significant drop in write-offs in 2025 signals a relative easing in credit losses across the industry.

Despite this improvement, asset quality risks within the banking sector remain elevated. The January 2026 Banking Developments Report indicates that the industry’s Non-Performing Loans ratio declined to 18.9 percent in December 2025, down from 21.8 percent recorded in December 2024.

When adjusted to exclude fully provisioned loan loss categories, the NPL ratio fell more sharply from 8.5 percent to 5.0 percent over the same period, reflecting stronger recovery and provisioning efforts by banks.

However, the total stock of non-performing loans increased marginally by 0.8 percent to GH¢21.0 billion in December 2025. This contrasts with the much higher growth rate of 31.4 percent recorded in December 2024, suggesting that while bad loans are still rising in absolute terms, the pace of growth has slowed considerably.

A breakdown of the NPL figures shows that the private sector continues to account for the overwhelming share of distressed loans. Its proportion of total non-performing loans rose to 97.5 percent in December 2025, up from 96.2 percent a year earlier. In contrast, the public sector’s share declined to 2.5 percent from 3.8 percent over the same period.

The central bank noted that the overall decline in the NPL ratio reflects broad-based improvements in asset quality across most sectors of the economy. However, two sectors recorded worsening loan performance. The construction sector saw its NPL ratio rise from 29.8 percent to 30.7 percent, while the agriculture, forestry and fishing sector experienced a more significant increase from 38.0 percent to 46.3 percent.

All other sectors reported improvements in asset quality during the review period, pointing to gradual stabilization in credit conditions within the banking industry.