Banks wrote off GH¢1.05 billion as bad debt in the first eight months of 2025, about a 46% decline over the same period in 2024.

This was in the form of loan losses, depreciation, among others.

During the same period in 2024, the Bank of Ghana wrote off GH¢1.95 billion as bad debt.

According to the Domestic Money Banks Income Statement for August 2025, interest expenses were estimated at GH¢10.11 billion, about 20.9% increase over the same period in 2024.

The Bank of Ghana disclosed that the banking industry’s asset quality improved in August 2025 relative to August 2024, although credit risk remains elevated.

“The improvement in asset quality was broad-based with a decrease in non-performing loans (NPLs) in all economic sectors. This led to a decrease in the NPL ratio for the banking industry”, it mentioned.

Asset Quality

The report stated that the banking industry’s asset quality improved during the period under review.

The industry’s NPL ratio decreased to 20.8% in August 2025, from 24.3% in August 2024.

When adjusted for the fully provisioned loan loss category, the industry’s NPL ratio also improved from 10.6% in August 2024 to 6.8% end-August 2025. This reflected decreasing shares of both sub-standard and doubtful loans in the NPL stock.

The decrease in the NPL ratio was due to the contraction in the NPL stock (4.4% year-on-year growth) relative to the growth in total loans (10.0% year-on-year growth).

The industry’s NPL stock contracted by 6.1% to GH¢19.8 billion in August 2025 from GH¢21.1 billion in August 2024, indicative of the impact of increased write-offs as well as the appreciation of the Ghana cedi.

Meanwhile, the private sector, being the largest recipient of the industry’s credit, consequently accounted for the largest share of NPLs as at the end of August 2025.

The proportion of NPLs attributable to the private sector increased marginally from 96.0% in August 2024 to 97.4% in August 2025, while that of the public sector share declined from 4.0% in August 2024 to 2.6 at the end of August 2025.