• About
  • Advertise
  • Privacy Policy
  • Contact
Tuesday, July 8, 2025
  • Login
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships
No Result
View All Result
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships
No Result
View All Result
The Vaultz News
No Result
View All Result

Ghanaian Banks Cut Bad Debt to GH¢654.2 Million in Early 2025 as Asset Quality Improves

June 30, 2025
Stephen M.Cby Stephen M.C
in Banking
0
Ghanaian Banks Cut Bad Debt to GH¢654.2 Million in Early 2025 as Asset Quality Improves

Ghana’s banking sector has continued to grapple with significant levels of credit risk, although recent data shows some improvement in asset quality.

According to the latest Domestic Money Bank Report released by the Bank of Ghana, commercial banks wrote off a total of GH¢654.2 million as bad debt during the first four months of 2025. This figure, while substantial, represents a notable decline from previous years. For context, banks wrote off GH¢863.4 million over the same period in 2024, and an even higher GH¢1.087 billion in 2022.

The write-offs primarily covered loan losses, depreciation, and other related provisions. This reduction in bad debts signals that while credit risk remains high, banks are making progress in tightening their credit management practices and improving loan recovery efforts.

RelatedPosts

Bank Al-Maghrib Joins Afreximbank’s PAPSS to Drive Intra-African Trade

CalBank Marks 35 Years of Values-Driven Growth With ‘Red Week’

UBA Ghana Board Chair Wins Top Honour for Financial Stewardship at UBA Ghana

Non-Performing Loans See Improvement

One of the more encouraging signs in the report was the decline in the industry’s non-performing loan (NPL) ratio. The NPL ratio, which measures the proportion of loans that are in default or close to being in default, dropped to 23.6% as of April 2025. This compares favourably with the 25.7% recorded in April 2024.

When adjusted for fully provisioned loan losses—loans for which banks have already set aside funds to cover expected losses—the NPL ratio further declined to 9.0% in April 2025, down from 11.1% in the same period last year. This improvement reflects not only better credit risk management but also stronger growth in total loan volumes across the banking sector.

The report attributed the reduction in the NPL ratio mainly to the faster expansion of total loans relative to the increase in non-performing loans. Overall, the industry’s NPL stock grew by 8.7%, rising from GH¢20.0 billion in April 2024 to GH¢21.7 billion in April 2025. Although the absolute value of NPLs increased, this growth was more than offset by a higher pace of lending, which helped improve the relative share of bad loans on bank balance sheets.

This development underscores the importance of scaling up lending prudently while maintaining strong risk assessment practices. It also highlights the resilience of banks in sustaining credit growth despite macroeconomic challenges and lingering pressures on businesses and households.

Private Sector Dominates NPL Composition

The breakdown of the NPL stock further reveals the persistent challenges faced by private sector borrowers. In April 2025, the private sector accounted for 93.4% of all non-performing loans, up from 91.0% in the previous year. Meanwhile, the public sector’s share of bad loans decreased to 6.6%, compared to 9.0% in April 2024.

This composition reflects the larger share of credit allocated to the private sector, which remains the engine of economic activity and employment in Ghana. However, it also points to the vulnerabilities of businesses, especially micro, small, and medium-sized enterprises (MSMEs), which often struggle to service debt due to volatile cash flows and limited access to working capital.

While the decline in bad debt write-offs and NPL ratios is encouraging, the figures still indicate elevated credit risk in the banking system. An NPL ratio of 23.6% remains high by international standards and suggests that banks must remain vigilant in credit appraisal and monitoring.

Policy measures to strengthen the resilience of the sector could include enhanced supervision, targeted support for distressed but viable borrowers, and policies to improve the broader business environment. Moreover, the high share of private sector NPLs signals the need for tailored interventions, such as credit guarantees and technical assistance for MSMEs.

Overall, the banking sector’s performance in early 2025 demonstrates progress in managing legacy problem loans and improving asset quality. However, sustained efforts will be critical to bring down bad debts further and ensure that lending contributes effectively to economic growth.

READ ALSO: World Bank Unlocks $360 Million Lifeline to Anchor Ghana’s Economic Renewal

Tags: AssetBank of GhanaGhanaian BanksNon-performing loans
Please login to join discussion
Previous Post

Deputy Energy Minister Champions Collaboration at Inauguration of AfSEM 

Next Post

China Lifts Ban On Japanese Seafood

Sign up for The Vaultz analytic wire

Get weekly news analysis from top editors at The Vaultz and stay informed on trending economic and business issues from across the globe.

Related Posts

Bright Simons, E&P, Azumah
General News

Bright Simons Slams E&P Over Gold Mine Controversy

July 8, 2025
Bank Al-Maghrib Joins Afreximbank’s PAPSS to Drive Intra-African Trade
Banking

Bank Al-Maghrib Joins Afreximbank’s PAPSS to Drive Intra-African Trade

July 8, 2025
Kwasi Sibo
Sports

Kwasi Sibo Eyes Black Stars Call-Up

July 8, 2025
Rishi Sunak Joins Goldman Sachs As Adviser
UK

Rishi Sunak Joins Goldman Sachs As Adviser

July 8, 2025
Dr. Cassiel Ato Forson, Gold, Ghana
General News

Ato Forson Declares War on Gold Smuggling at GoldBod Task Force Inauguration

July 8, 2025
Us Supreme Court Approves Handover Of Trump’s Tax Records
USA

House Democrats Demand Release Of Epstein Files Involving Trump

July 8, 2025
Bright Simons, E&P, Azumah
General News

Bright Simons Slams E&P Over Gold Mine Controversy

by Silas Kafui AssemJuly 8, 2025
Bank Al-Maghrib Joins Afreximbank’s PAPSS to Drive Intra-African Trade
Banking

Bank Al-Maghrib Joins Afreximbank’s PAPSS to Drive Intra-African Trade

by Stephen M.CJuly 8, 2025
Kwasi Sibo
Sports

Kwasi Sibo Eyes Black Stars Call-Up

by Evans Junior OwuJuly 8, 2025
Rishi Sunak Joins Goldman Sachs As Adviser
UK

Rishi Sunak Joins Goldman Sachs As Adviser

by Lawrence AnkutseJuly 8, 2025
Dr. Cassiel Ato Forson, Gold, Ghana
General News

Ato Forson Declares War on Gold Smuggling at GoldBod Task Force Inauguration

by Silas Kafui AssemJuly 8, 2025
Us Supreme Court Approves Handover Of Trump’s Tax Records
USA

House Democrats Demand Release Of Epstein Files Involving Trump

by Comfort AmpomaaJuly 8, 2025
Bright Simons, E&P, Azumah
Bank Al-Maghrib Joins Afreximbank’s PAPSS to Drive Intra-African Trade
Kwasi Sibo
Rishi Sunak Joins Goldman Sachs As Adviser
Dr. Cassiel Ato Forson, Gold, Ghana
Us Supreme Court Approves Handover Of Trump’s Tax Records
[/vc_row_inner]

Recent News

  • Bright Simons Slams E&P Over Gold Mine Controversy
  • Bank Al-Maghrib Joins Afreximbank’s PAPSS to Drive Intra-African Trade
  • Kwasi Sibo Eyes Black Stars Call-Up
  • Rishi Sunak Joins Goldman Sachs As Adviser
  • Ato Forson Declares War on Gold Smuggling at GoldBod Task Force Inauguration
The Vaultz News

Copyright © 2021 The Vaultz News. All rights reserved.

Navigate Site

  • About
  • Advertise
  • Privacy Policy
  • Contact

Follow Us

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2D
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships

Copyright © 2021 The Vaultz News. All rights reserved.