Ghana’s banking sector closed 2025 with its strongest capital position in years, and the numbers suggest the improvement is genuine rather than a product of regulatory forbearance, according to the Ghana Association of Banks (GAB) 2025 Banks’ Financial Performance Dashboard.
The industry’s Capital Adequacy Ratio (CAR), the buffer banks hold against potential losses, rose from 14% in 2024 to 17.5% in 2025. What makes the result significant is what happens when regulatory concessions are stripped away. In December 2024, the CAR including temporary reliefs stood at 14%, while the equivalent ratio calculated without those reliefs was only 11.3%. By December 2025, both measures had converged at 17.5%, meaning the headline figure is now supported by real capital rather than accounting accommodations.
The convergence follows the withdrawal of emergency measures the Bank of Ghana (BoG) introduced after the Domestic Debt Exchange Programme (DDEP) eroded capital buffers across the sector. The central bank had reduced the Capital Conservation Buffer from 3% to zero, temporarily lowering the effective minimum CAR from 13% to 10% to help banks absorb DDEP-related losses. With those reliefs now phased out, 21 of 23 licensed commercial banks met the fully loaded requirement by December 2025.
Asset quality is also turning. The industry’s non-performing loan (NPL) ratio fell from 21.8% to 18.9% in 2025. The GAB dashboard recorded a sharper decline when the loss category of NPLs is excluded, with that measure dropping from 8.5% to 5%, pointing to genuine improvements in underwriting discipline and loan recovery rather than a reclassification exercise.
“A key positive development is the broad decline in NPL ratios for a significant number of banks, indicating improved credit risk management, stronger loan recovery efforts, and better underwriting standards,” GAB noted.
The aggregate balance sheet reflected the recovery across all major lines. Total industry assets grew 21.5% to GHS446.9 billion, total deposits rose 17.8% to GHS325.3 billion, and total advances expanded 16% to GHS111 billion. Cumulative new loan disbursements jumped from GHS80.95 billion in October 2025 to GHS104.17 billion by December, with credit to the private sector growing at real rates of 13% compared to just 2% the previous year.
The sector’s net interest margin contracted from 14.2% to 11.5% as lower interest rates compressed the spread between lending and deposit rates. GAB characterised this as normalisation consistent with the easing monetary cycle, not a deterioration in earnings quality.
Risks remain. The association flagged persistent pockets of extremely high NPL ratios at individual banks and called for stronger coordination between regulators and the judicial system to improve loan recovery and enforcement. Fitch Ratings has forecast that the majority of Ghanaian banks will bring NPL ratios below 15% by 2026, though only four banks currently meet the Bank of Ghana’s 10% target threshold.
