Ghana’s banking sector has posted its most convincing set of financial soundness numbers yet, with the industry’s Capital Adequacy Ratio (CAR), a measure of how much capital a bank holds as a buffer against potential losses, rising sharply from 14% to 17.5% between 2024 and 2025, a gain that analysts at the Ghana Association of Banks say reflects broad-based recapitalisation across previously weak institutions.
The improvement, detailed in GAB’s 2025 Banks’ Financial Performance Dashboard, is particularly striking because it holds even when regulatory reliefs are stripped out. The adjusted CAR, calculated without any regulatory concessions, climbed from 11.3% to 17.5% over the same period, suggesting the gains are structural rather than cosmetic.
The turnaround tracks closely with Ghana’s improving macroeconomic backdrop. Inflation fell sharply to 5.4% by end-2025, the policy rate was cut to 18%, and real GDP growth strengthened to 5.8% or 7.1% excluding oil. Lending rates eased to 19.17%, opening space for credit expansion that had been choked off during the high-rate years.
“Ghana’s banking sector entered 2025 on a recovery path after years of macroeconomic stress, including high inflation, elevated interest rates, exchange rate volatility, and rising credit risk,” GAB noted in the report.
Asset quality, long a sore point for the sector, is also recovering. The industry’s non-performing loan ratio (NPL) fell from 21.8% to 18.9% in 2025. A sharper decline was recorded when the loss category is excluded, that measure dropped from 8.5% to 5%, pointing to genuine improvements in underwriting discipline and loan recovery rather than a reclassification exercise.
At the individual bank level, the picture is mixed but directionally positive. Several institutions that previously carried moderate or elevated NPL ratios recorded meaningful reductions during the year. A handful of banks, however, continue to carry extremely high NPL ratios, and the report flagged these as persistent pockets of stress requiring closer attention.
“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 said.
The recovery in capital positions has been particularly dramatic among formerly undercapitalised institutions. Several banks that reported weak or even negative capital levels in 2024 have moved to solid positive territory in 2025, through a combination of recapitalisation, retained earnings, and balance sheet restructuring. A small number of already well-capitalised banks saw slight declines, a function of asset expansion outpacing capital growth rather than any deterioration in financial health.
The aggregate balance sheet tells a similarly positive story. Total industry assets grew 21.5% to GHS446.9 billion, up from GHS367.8 billion in 2024. Total deposits rose 17.8% to GHS325.3 billion, while total advances grew 16% to GHS111 billion. All three growth rates moderated from 2024 levels, which GAB described as normalisation consistent with a maturing recovery.
Despite the headline progress, the association was careful to temper expectations. “The persistence of relatively elevated non-performing loans in parts of the system highlights the need for stronger institutional coordination, particularly among regulators and the judicial system, to improve loan recovery and enforcement,” the report stated.
The net interest margin, however, declined from 14.2% to 11.5%, as the lower interest rate environment squeezed the spread between lending and deposit rates. GAB characterised this as normalisation rather than weakness, noting that earnings capacity is still supported by balance sheet growth and improved operational efficiency.
The gains are real, but they are not yet self-sustaining. “Going forward, the sector’s performance will be strongly influenced by the need for a stable and predictable macroeconomic and regulatory environment to support business planning, lending expansion, and risk pricing,” the association said.
