The Agricultural Development Bank (ADB) has flagged its reliance on government support and regulatory forbearance to remain solvent, after posting improved but still negative capital levels in its 2024 financial statements.
According to the bank’s end-of-year results, ADB’s capital adequacy ratio (CAR), the key regulatory measure of a bank’s solvency, improved from a deeply distressed -22.61% in 2023 to -3.15% by the end of 2024. The rebound was largely driven by a government-led rights issue in 2024, which injected fresh equity into the bank.
Despite this progress, ADB remains far below the Bank of Ghana’s minimum CAR requirement of 10%, extended from 13% to ease the post-COVID sector recovery. The central bank has already granted ADB and other struggling lenders a temporary reprieve, extending its regulatory forbearance period until December 2025.
The bank’s directors, in their going-concern assessment, disclosed that they had secured a formal commitment from the Government of Ghana through the Ministry of Finance to inject additional capital “in the near future.” They expressed confidence that this, together with aggressive loan recovery measures, would help ADB return to full compliance.
For now, liquidity buffers remain intact, with the bank generally meeting BoG’s liquidity requirements. This has allowed daily operations to continue without disruption. However, the real challenge lies in whether the bank can meet the capital adequacy threshold before the forbearance window closes.
In 2025, government reaffirmed its commitment to stabilising the financial sector by pledging a GH₵2.2 billion recapitalisation package for state-owned development banks. Out of this, the National Investment Bank (NIB) has already received a GH₵1.4 billion injection in cash and bonds to shore up its capital base. Meanwhile, the Agricultural Development Bank (ADB) and the Consolidated Bank Ghana (CBG) have been slated for recapitalisation in 2026, according to the Finance Ministry’s outlined plan.
This timeline, however, raises concerns for ADB. With the forbearance deadline set to expire in December 2025, the bank risks falling short of the regulatory capital threshold unless loan recoveries accelerate or intervention comes sooner than planned.
The pressure is further compounded by the bank’s persistently high levels of distressed credit. Non-performing loans (NPLs) accounted for 70.25% of gross loans in 2023, worsening to 75.26% in 2024. Such elevated NPL ratios continue to erode profitability and weaken capital formation, leaving the bank heavily dependent on state intervention to secure its future.
In effect, ADB’s survival now rests on a delicate balance: sustained recovery of bad loans, government’s timely fulfilment of its recapitalisation pledge, and continued regulatory patience. Without these pillars, the bank risks breaching solvency rules once the grace period lapses.
