Ghana’s banking sector continues to face an uneven recovery in asset quality, with some lenders maintaining relatively low levels of non-performing loans (NPLs) while others remain weighed down by significant credit risks, 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% at the end of 2025, followed by Fidelity Bank Ghana at approximately 6.1% and Guaranty Trust Bank Ghana at 7.1%.
Zenith Bank Ghana also ended the year with an NPL ratio below 10%, at 8.5%, while Access Bank Ghana recorded 9.2%.
The figures point to significant differences in the quality of loan portfolios across the industry, with the relatively low ratios at some lenders contrasting sharply with the persistent credit challenges facing others.
UBA’s Dramatic Turnaround
UBA Ghana’s performance represents one of the most dramatic turnarounds in the industry. The bank’s NPL ratio fell from 29.40% in 2021 to 2.11% in 2025, with non-performing loans reducing from GH¢334 million to GH¢28 million over the same period.
Kenneth Amponsah, Chief Risk Officer of UBA Ghana, attributed the achievement to disciplined lending practices and strong recovery systems.
“The improvement in our NPL ratio did not happen by chance. It is the result of consistent quality at entry discipline, better lending standards, and strong credit monitoring and recovery systems,” he said.
The bank’s recovery efforts produced GH¢168 million in recoveries in 2025 alone, supported by strong Board oversight and clear accountability across the organisation.
Rising Bad Loans Raise Concerns at Some Banks
Despite their comparatively low NPL ratios, some banks recorded substantial increases in impaired credit during the year. Access Bank Ghana’s NPL ratio rose sharply from 2.1% in 2024 to 9.2% in 2025, while Zenith Bank Ghana’s increased from 1.0% to 8.5%. GT Bank Ghana also recorded an increase, climbing from 2.4% to 7.1% over the same period.
Although these banks remained among the institutions with relatively low NPL ratios in 2025, the year-on-year increases point to emerging asset-quality pressures that could require closer monitoring. A relatively low NPL ratio provides a snapshot of current asset quality, but a sharp increase may signal deteriorating repayment conditions.
CalBank, meanwhile, recorded one of the most significant improvements among the banks highlighted, reducing its NPL ratio to 17.0% from 47.5% in 2024. Prudential Bank also made progress, with its ratio falling to 57.0% from 74.0%. While the improvements suggest a reduction in the proportion of loans classified as non-performing, both institutions continued to record elevated ratios at the end of 2025.
ADB, NIB Remain Burdened by High NPL Ratios
The most pronounced credit challenges were recorded at Agricultural Development Bank (ADB) and National Investment Bank (NIB), which ended 2025 with NPL ratios of 70.5% and 69.7%, respectively. ADB’s ratio declined from 75.3% in 2024, while NIB’s fell from 75.5%.
Despite the reductions, non-performing loans continued to account for a substantial proportion of their respective loan portfolios. The two state-owned banks have received substantial government support through recapitalisation under the Ghana Financial Sector Strengthening Strategy.
At ADB, the government’s restructuring efforts produced a profit after tax of GH¢367.29 million for the year ended December 31, 2025 — a sharp turnaround from the GH¢225.09 million loss reported in the previous year. The bank’s capital adequacy ratio improved significantly to 27.17% from negative 3.15%, following a recapitalisation exercise. Recoveries of GH¢381.4 million from non-performing loans also supported the turnaround.
At NIB, the government’s recapitalisation commitment has been reported at GH¢3.43 billion. The bank recorded a profit after tax of GH¢343.9 million compared with GH¢2.8 million in 2024, with equity recovering to GH¢1.55 billion. Yet its non-performing loan ratio remained at 69.7% at the end of 2025.
NIB’s difficulties have been linked to its exposure to the construction sector, where the bank reportedly had about 42% of its loan book concentrated, with delays in government payments to contractors contributing to defaults. The Domestic Debt Exchange Programme also affected its financial position.
Industry analysts have raised questions about accountability, noting that restoring a bank’s capital is not the same as recovering its bad loans, and returning to profit is not the same as establishing accountability for past losses.
Universal Merchant Bank also remained under pressure, recording an NPL ratio of 52.3%, down from 54.9% a year earlier. Consolidated Bank Ghana experienced a deterioration in asset quality, with its ratio rising to 33.4% from 12.5%. Stanbic Bank Ghana also recorded an increase, from 17.1% to 24.6%.
Industry-Wide Improvement Masks Divergence
At the industry level, the Bank of Ghana reported that the NPL ratio improved to 18.9% in December 2025, from 21.8% in 2024. Governor Dr Johnson Pandit Asiama acknowledged the improvement but noted that the 18.9% ratio remained high.
“Ongoing policy measures aimed at resolving legacy loans, enforcing strict credit underwriting standards, and addressing wilful defaults are expected to further improve asset quality,” he said at the 128th Monetary Policy Committee press conference in January 2026.
The adjusted NPL ratio — which excludes the loss category for which 100% provision has been made — fell to 5.0% in December 2025 from 8.5% in December 2024, pointing to progress in resolving the most distressed assets on banks’ balance sheets.
The NPL stock, however, increased marginally during the review period, with the stock of gross loans and advances rising by 16.2% to GH¢111.0 billion, reflecting increases in private sector credit.
Salary Deduction Delays Add to Banks’ Credit Concerns
The asset-quality figures come amid concerns by the Ghana Association of Banks over persistent delays in remitting salary deductions intended to repay loans contracted by public sector workers.
The association’s Chief Executive Officer, John Awuah, has indicated that banks could suspend new lending to public sector workers in the coming weeks if the outstanding remittances remain unresolved. The remittances of loan deductions to lenders were in arrears for three months, although the Controller and Accountant-General’s Department had already deducted the amounts from the salaries of public sector workers.
“We have begun discussions, and in the coming weeks and days we are going to take action to suspend total lending to public sector workers under the Controller and Accountant-General’s payroll,” Awuah said at the association’s 43rd Annual General Meeting in Accra.
The proposed action could affect teachers, nurses, doctors and other public sector workers who rely on payroll-based loans to meet personal and household financial needs.
Awuah explained that the problem has contributed to the growing number of non-performing loans in the banking sector, putting pressure on banks and affecting their ability to lend.
The planned suspension comes nearly two months before the Bank of Ghana’s December 2026 deadline for banks to bring their NPL ratios down to 10%. The industry’s NPL ratio has been steadily improving, falling from 23.1% in June 2025 to 16.1% in June 2026 and further to 15.7% in August 2026, but remains 5.7 percentage points above the central bank’s target.
Awuah also revealed that the delay in remitting payroll deductions to banks has persisted for more than a decade, with lenders repeatedly having to engage the authorities on the matter.
Outlook
The contrasting movements across the banking sector reveal an industry in which progress in managing impaired credit remains uneven. While some institutions have reduced their exposure to non-performing loans, others are experiencing rising impairment levels or continue to carry substantial legacy credit risks.
High NPL ratios can weigh on banks’ earnings through impairment charges, tie up capital and limit their ability to extend fresh credit. They can also weaken lenders’ capacity to support businesses and households, particularly when credit risks are accompanied by funding or liquidity constraints.
However, NPL ratios should not be viewed in isolation. Capital adequacy, liquidity, profitability, loan-loss provisions and the extent to which bad debts are covered by collateral are also important in assessing a bank’s overall financial position.
The Bank of Ghana announced new measures on October 6, 2026, to address high non-performing loans across regulated financial institutions, expressly identifying threats to profitability, liquidity, solvency and financial stability. The regulator’s December 2026 deadline for banks to bring NPL ratios below 10% will be a critical test of whether the industry’s recovery can be sustained — and whether the gap between the strongest and weakest lenders can be narrowed.
