Commercial banks operating in Ghana recorded GH¢1.23 billion in provisions for loan losses and depreciation during the first half of 2026, representing a significant increase in the financial resources set aside to cover potential losses within the banking sector.
The figure, contained in the highlights of the Domestic Money Banks’ Income Statement, reflects a 38 percent year on year increase over the GH¢893.0 million recorded in June 2025.
The development comes against the backdrop of persistent concerns about the quality of bank assets, even though several important indicators of credit risk have improved over the past year.
According to the Bank of Ghana’s July 2026 Monetary Policy Report, asset quality risks remained elevated in the banking sector as of June 2026, notwithstanding the improvement recorded in key measures of loan performance.
The industry’s non performing loan ratio declined to 16.1 percent in June 2026, compared with 23.1 percent during the corresponding period in 2025. This reduction indicates that the proportion of loans classified as non performing had fallen considerably over the twelve month period.
Further improvement was recorded in the adjusted non performing loan ratio, which excludes the category of loans that had already been fully provided for. The adjusted ratio decreased from 8.5 percent in June 2025 to 4.6 percent in June 2026.
The total stock of non performing loans also contracted during the period under review. It fell from GH¢20.7 billion in June 2025 to GH¢19.9 billion by June 2026, indicating a reduction in the absolute value of loans facing repayment difficulties.
Despite these favourable developments, the central bank continues to regard asset quality vulnerabilities as a significant concern. The decline in bad loan indicators has therefore not eliminated the risks associated with borrowers’ ability to meet their financial obligations.
The composition of non performing loans further demonstrates the dominant role of private sector borrowers in the lending activities of Ghana’s banking industry.
Private sector borrowers accounted for 98.0 percent of the banking sector’s non performing loans in June 2026, compared with 96.4 percent a year earlier. Their contribution to the total stock of distressed loans consequently increased over the period.
By contrast, the proportion of non performing loans attributable to the public sector declined from 3.6 percent in June 2025 to 2.0 percent in June 2026.
The distribution of distressed loans remains broadly consistent with the structure of credit extended by banks, where private sector enterprises and households account for the overwhelming share of outstanding lending.
The latest figures consequently present a mixed picture of Ghana’s banking sector. While the reduction in non performing loans suggests an improvement in credit conditions, the substantial increase in loan loss and depreciation provisions indicates that financial institutions continue to face significant exposure to potential losses.
The figures also underscore the importance of prudent lending, effective credit monitoring and sound risk management as banks expand their support for private sector activity and economic growth.
