Commercial banks operating in Ghana recorded GH¢1.23 billion in bad debt, depreciation, and impairment provisions during the first half of 2026, even as key non-performing loan (NPL) indicators showed steady signs of recovery across the sector.
The amount was 38 percent higher than the GH¢893 million recorded during the same period in 2025, according to highlights of the universal banks’ income statements contained in the Bank of Ghana’s July 2026 Monetary Policy Report.
The GH¢1.23 billion represents provisions for loan losses and depreciation. Such provisions are charges banks recognise for expected losses and should not automatically be treated as loans permanently written off.
Bad-loan ratio improves
The increase came despite a marked improvement in the industry’s non-performing loan ratio.
Bad loans accounted for 16.1 percent of total loans in June 2026, down from 23.1 percent a year earlier. When fully provisioned loan losses were excluded, the adjusted NPL ratio declined from 8.5 percent to 4.6 percent.
The value of non-performing loans also fell to GH¢19.9 billion from GH¢20.7 billion over the period.
These figures suggest that credit conditions are moving in the right direction, but the central bank remains cautious. Its report said “asset quality risks remained elevated” despite the improvement in the headline indicators.
The higher provisions may therefore reflect continued concern about borrowers’ ability to repay, alongside conservative recognition of potential losses.
Private businesses dominate NPL stock
Private-sector borrowers accounted for 98 percent of the banking industry’s non-performing loans in June, up from 96.4 percent in the previous year.
The public sector’s contribution declined from 3.6 percent to 2 percent, reflecting the concentration of bank lending within private businesses and households.
The latest figures present a mixed picture. Banks are carrying fewer bad loans relative to their total credit portfolios, yet they are spending more to cover possible losses. The Bank of Ghana will likely keep asset quality under close watch as lending expands.
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