Banking sector recovery accelerates as CAR hits 17.5%

Ghana’s banking sector closed 2025 on a robust footing, with fresh data pointing to stronger financial stability, healthier balance sheets, and renewed public confidence.

According to the Ghana Association of Banks, the industry’s Capital Adequacy Ratio (CAR) rose from 14% to 17.5%, underscoring improved resilience across the sector.

More notably, the CAR excluding regulatory reliefs also surged from 11.3% to 17.5%, signaling that banks are increasingly relying on their own financial strength rather than temporary support measures.

The report highlighted significant gains in asset quality. Non-performing loans (NPLs) dropped from 21.8% to 18.9%, while NPLs excluding loss-category loans fell sharply from 8.5% to 5%. These improvements reflect stronger loan recovery efforts and tighter credit risk management.

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The latest indicators suggest a sector gradually moving beyond years of economic pressures, debt restructuring challenges, and rising credit risks.

Stronger capital buffers mean banks are now in a better position to absorb shocks, support lending activities and withstand economic uncertainty without putting depositor funds at risk.

The industry also recorded significant growth across key balance sheet indicators.

Total banking sector assets rose by 21.5%, increasing from GH¢367.8 billion in 2024 to GH¢446.9 billion in 2025.

Deposits also grew strongly by 17.8% from GH¢276.2 billion to GH¢325.3 billion, while total advances went up by 16% from GH¢95.7 billion to GH¢111 billion.

The rise in deposits points to improving public confidence in the banking sector, while the increase in advances signals a gradual recovery in credit extension to businesses and households.

Overall, the latest indicators suggest Ghana’s banking sector is gradually moving beyond the survival phase into a period of recovery and consolidation, backed by stronger balance sheets, improved asset quality and more prudent risk management practices.

SO/SA

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