Banks in Ghana wrote off GH¢654.2 million as bad debt in the first four months of 2025.

According to the Domestic Money Bank Report by the Bank of Ghana, this is lower than the GH¢863.4 million recorded in April 2024 and GH¢1.087 billion in April 2022, respectively.

The provision for bad debt was classified as loan losses, depreciation & others.

The report pointed out that the industry’s exposure to credit risk, however, improved between April 2024 and April 2025, as indicated by a decline in the non-performing loan (NPL) ratio during the review period, but remained elevated in April 2025.

Similarly, the banking industry’s asset quality improved during the period under review. The NPL ratio reduced to 23.6% in April 2025, from 25.7% in April 2024.

When adjusted for the fully provisioned loan loss category, it declined to 9.0% in April 2025 from 11.1% in April 2024.

The decrease in the NPL ratio was attributable to the higher growth in total loans relative to the growth in NPL stock.

The industry’s NPL stock grew by 8.7% to GH¢21.7 billion in April 2025, up from GH¢20.0 billion in April 2024.

The decomposition of the NPL stock indicated that the private sector accounted for the larger share of non-performing loans, in line with its larger share of industry credit.

The proportion of NPLs attributable to the private sector picked up to 93.4% in April 2025, from 91.0% in April 2024, while that of the public sector decreased to 6.6% in April 2025, from 9.0% in a similar period 2024.