Banks operating in Ghana wrote off GH¢1.39 billion in non-performing loans in the first ten months of 2025 as part of intensified efforts to strengthen balance sheets and manage ongoing credit risks.
The sharp increase in write-offs reflects a deliberate clean-up of legacy loan losses, aimed at improving asset quality and reinforcing capital buffers amid a cautious lending environment.
Figures from the Domestic Money Banks Income Statement show that write-offs rose by 56.7 per cent over the period, a significant jump compared with the 10 per cent increase recorded in October 2024, signalling a more aggressive provisioning approach across the sector.
Provisioning push
The rise was driven largely by higher provisions for loan losses, depreciation and related charges, as banks addressed lingering weaknesses in parts of their loan portfolios. Analysts say the trend indicates that banks are prioritising long-term stability over short-term profitability by recognising impaired assets more decisively.
Despite the higher costs, the strategy appears to be paying off, with clear signs of improvement in the industry’s overall asset quality.
Improving asset quality
The sector’s non-performing loans (NPL) ratio fell to 19.5 per cent in October 2025, down from 22.7 per cent a year earlier, pointing to better credit performance. When adjusted for fully provisioned loan categories, the NPL ratio also improved to 6.8 per cent, from 9.4 per cent in October 2024.
The gains were driven mainly by a reduction in sub-standard loans and a shift in the composition of NPLs, with a larger share classified as loss and subsequently written off.
A senior banking source noted that the decline suggests the industry is steadily working through problem assets built up in previous years.
Lower NPL stock
The improved ratios were supported by a drop in the absolute stock of non-performing loans and a modest recovery in credit growth. Total NPLs declined by 6.2 per cent to GH¢20.1 billion in October 2025, from GH¢21.4 billion a year earlier.
The reduction reflects a combination of increased write-offs, improved borrower repayments and gains in the Ghana cedi, which reduced the local currency value of some foreign currency-denominated loans. An economist noted that the currency appreciation provided additional relief for banks with foreign currency exposures.
