Banks operating in Ghana wrote off GH¢1.23 billion in bad loans in the first half of 2026, representing a 38% increase over the GH¢893 million recorded during the same period in 2025.
The increase highlights the continued pressure on banks from customers who have struggled to repay loans, even though overall asset quality in the banking sector has improved.
The latest figures, contained in the July 2026 Monetary Policy Report of the Bank of Ghana, show that banks made substantial provisions for loan losses and depreciation during the six-month period.
NPL ratio improves
Despite the higher loan write-offs, the banking sector recorded a significant improvement in its non-performing loan (NPL) ratio.
The industry-wide NPL ratio declined from 23.1% in June 2025 to 16.1% in June 2026.
The NPL ratio adjusted for the fully provisioned loan-loss category also fell sharply from 8.5% to 4.6% over the same period.
The stock of non-performing loans declined from GH¢20.7 billion in June 2025 to GH¢19.9 billion in June 2026.
The figures suggest that banks have made progress in cleaning up their loan books and managing credit risks, although the level of bad loans remains a concern.
The Bank of Ghana said asset-quality risks remained elevated despite improvements in key indicators.
The private sector continued to account for the overwhelming majority of non-performing loans, with its share increasing from 96.4% in June 2025 to 98% in June 2026.
What does the GH¢1.23bn write-off mean?
To be sure, a loan write-off does not necessarily mean that a bank has simply given away GH¢1.23 billion or that all affected borrowers have been forgiven their debts.
Rather, banks set aside money to recognise loans that they consider unlikely to be recovered. A write-off is generally an accounting recognition that a loan has become sufficiently impaired, although banks may still pursue recovery from borrowers depending on the circumstances.
For businesses, particularly small and medium-sized enterprises, the figures highlight the importance of maintaining a strong repayment record.
Banks facing higher credit losses may become more cautious when approving new loans, particularly for businesses considered risky. This could translate into stricter lending requirements, stronger demands for collateral and closer scrutiny of businesses’ cash flows and financial statements.
Businesses with strong financial records, however, could benefit from the improving overall asset-quality position as banks become more confident about extending credit.
For individual borrowers, the development is a reminder that missed loan repayments can have longer-term consequences. Banks may respond to high levels of bad loans by strengthening credit assessments and becoming more selective about borrowers.
Customers seeking personal, mortgage, vehicle or business loans may therefore face greater scrutiny of their income, existing debts and repayment capacity.
A mixed picture for the banking sector
The latest figures present a mixed picture for Ghana’s banking industry.
On one hand, the 38% increase in loan-loss provisions/write-offs indicates that banks continue to bear significant losses from problem loans.
On the other hand, the decline in the NPL ratio, the reduction in the stock of bad loans and the improvement in the adjusted NPL ratio suggest that the sector is gradually strengthening its loan portfolio.
The challenge for banks will be to sustain the improvement in asset quality while continuing to provide credit to businesses and households.
For the wider economy, healthier bank balance sheets could eventually support increased lending and investment, provided banks become sufficiently confident that borrowers can repay their loans.
The developments therefore point to a banking sector that is cleaning up its loan book but remains cautious about credit risk, particularly in the private sector.
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