Ghana’s banking sector faces heightened pressure as regulators move to enforce stricter prudential rules aimed at curbing non-performing loans (NPLs), Fitch Ratings reveals.
The Bank of Ghana (BoG) announced in August 2025 that all financial institutions must cut their NPL ratios to below 10% by the end of 2026.
Lenders exceeding 15% will be barred immediately from paying dividends or bonuses, while those between 10% and 15% will face similar restrictions if they remain non-compliant for two consecutive years.
According to Fitch, only four of Ghana’s 23 banks had NPL ratios below 10% by mid-2025, while more than half were above 15%.
The agency expects most lenders to meet the new threshold through strategic write-offs, but warned that compliance will not be uniform.
It said that six banks could struggle to meet capital adequacy requirements once regulatory forbearance on losses from cedi-denominated government bonds expires at the end of 2025.
“These banks will face the most difficulty in bringing their NPL ratios below 15% by end-2026 given their very high problem loans and constrained ability to write off such loans due to their limited capital buffers,” Fitch said in a review published on Monday.
NPLs remain stubbornly high
The sector’s NPL ratio spiked to 26.7% in the first quarter of 2024, driven by macroeconomic volatility, delayed payments to government contractors and weak credit growth. By mid-2025, it had eased slightly to 23.1%, signalling persistent pressures.
However, excluding fully provisioned loans, the ratio stood at 8.5% in June, indicating banks can execute significant write-offs without fresh provisions.
Fitch noted that strong pre-impairment operating profits, supported by high-yielding sovereign securities, should help absorb new provisions without eroding capital.
Strong operating environment offers support
Improved macroeconomic conditions are expected to aid the clean-up. Ghana’s Long-Term Issuer Default Rating was upgraded to ‘B-’ with a Stable outlook in June following a debt deal with most external creditors.
The cedi has strengthened, inflation is projected to decline, and banks are set to benefit from a more stable environment. “Improved operating conditions should help attenuate problem loan generation and support stronger loan growth,” Fitch noted.
However, it cautioned that “foreclosures and restructurings are unlikely to materially reduce NPL ratios before the new prudential limits take effect,” citing slow legal processes and lengthy cure periods.
