Ghana’s banking sector ended 2025 on a stronger footing, recording significant improvements in capital strength, asset quality and lending activity as the industry continued its recovery from recent economic shocks.
According to the latest industry analysis by the Ghana Association of Banks, the sector’s Capital Adequacy Ratio (CAR) rose sharply from 14% in 2024 to 17.5% in 2025, reflecting stronger financial resilience across commercial banks.
The Capital Adequacy Ratio measures the financial strength of banks by comparing their capital base to the risks associated with lending and investments.
Higher ratios generally indicate that banks are better positioned to absorb losses and protect customer deposits during periods of economic stress.
Stronger Capital Buffers Signal Stability
The improvement in the sector’s capital position is considered particularly significant because it was achieved largely without relying on temporary regulatory relief measures introduced during the recent economic crisis.
According to the report, CAR excluding regulatory reliefs climbed from 11.3% to 17.5%, suggesting that banks are increasingly strengthening their internal balance sheets rather than depending on emergency support mechanisms.
Industry analysts say the latest figures point to a banking sector gradually regaining stability after years of economic turbulence marked by high inflation, debt restructuring pressures and weakened loan quality.
The sector also recorded notable progress in reducing non-performing loans (NPLs), commonly referred to as bad loans.
Total NPLs declined from 21.8% to 18.9% in 2025. More significantly, NPLs excluding fully impaired or loss-category loans dropped sharply from 8.5% to 5%.
The decline reflects improved credit risk management, stricter lending standards and stronger loan recovery efforts by banks across the country.
Financial experts say lower bad loan levels improve banks’ ability to extend credit to businesses and households while reducing pressure on profitability and capital reserves.
Deposits and Lending Activity Increase
The banking industry also recorded strong balance sheet growth during the year. Total sector assets increased by 21.5%, rising from GH¢367.8 billion in 2024 to GH¢446.9 billion in 2025.
Customer deposits grew by 17.8% to GH¢325.3 billion, while total loans and advances expanded by 16% to GH¢111 billion.
The increase in deposits is widely viewed as a sign of improving public confidence in the banking system, while the rise in lending activity points to a gradual recovery in credit support for businesses and households.
Overall, the latest data suggests Ghana’s banking sector is moving beyond crisis management and entering a more stable recovery phase supported by stronger capital buffers, improving asset quality and disciplined risk management practices.
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