Non-Performing Loans in Ghana: Why Some Banks Are Struggling While Others Stay Resilient

Ghana’s banking sector is once again under the spotlight, and this time the story is written in the numbers behind non-performing loans. At the extreme end, one bank records an NPL ratio of 70.5%, while at the other, a regional peer reports just 2.1%. This wide dispersion is not just a statistic; it reflects deeper structural realities within the financial system.

Non-Performing Loans (NPL) in Ghana 2025

Non-performing loans, commonly defined as loans overdue by more than 90 days, are one of the clearest indicators of banking sector health. According to the World Bank, elevated NPL ratios often signal deteriorating asset quality and potential instability in the financial system. In Ghana, these risks have persisted even after the financial sector clean-up, suggesting that the problem is more structural than cyclical.

A striking pattern emerges when the banks are ranked. The institutions with the highest NPL ratios are predominantly locally owned. While this might suggest a relationship between ownership and risk, the reality is more nuanced. Many Ghanaian-owned banks have historically had higher exposure to sectors such as energy, state-owned enterprises, and government-linked projects, where payment delays and restructuring have been common. These exposures have translated into elevated NPL ratios, not necessarily weaker risk management alone.

In contrast, Nigerian banks operating in Ghana show significantly lower NPL ratios, all within single digits. This difference can be attributed to several factors, including more diversified loan portfolios, stronger risk pricing frameworks, and broader regional operations that dilute concentration risk. These banks also tend to have more robust capital buffers and stricter credit discipline, shaped by a more competitive and larger domestic market.

The industry average NPL ratio, estimated around 20%, further highlights the divide. While some banks operate well below this benchmark, others exceed it by a wide margin, creating a two-speed banking system where resilience and vulnerability coexist.

However, it is important to note that extremely high NPL ratios in some institutions may reflect legacy issues rather than current lending practices. In several cases, these figures are influenced by historical loan book challenges, restructuring programs, and sector-specific shocks rather than new credit risk alone.

The key takeaway is not simply that some banks are underperforming, but that Ghana’s banking sector is still adjusting to structural imbalances. Addressing these challenges will require more than regulatory oversight. It will demand improved credit risk assessment, sector diversification, and stronger recovery mechanisms.

Ultimately, the story of non-performing loans in Ghana is a story of transition. While some banks are still weighed down by the past, others are positioning themselves for a more resilient future. The question is not whether the sector will stabilize, but how quickly it can close the gap between its weakest and strongest performers.