Ghana's banking sector records sharp rise in bad debt write-offs in 2025

Banks in Ghana wrote off a total of GH¢1.39 billion in bad debts during the first ten months of 2025, marking a 56.7 per cent surge in loan clean-up activities compared with the previous year.

According to data from the Domestic Money Banks Income Statement, the sharp increase far outpaced the 10 per cent rise recorded in the corresponding period of 2024, signalling a more aggressive approach by banks to provisioning amid persistent credit risks.

The write-offs were primarily driven by loan losses, depreciation charges and other related expenses as lenders moved to bolster their balance sheets.

Despite the higher level of bad debt write-offs, the banking sector’s asset quality showed notable improvement over the period. The industry’s non-performing loans (NPL) ratio fell to 19.5 per cent in October 2025 from 22.7 per cent a year earlier. 

When adjusted for fully provisioned loss categories, the ratio improved further to 6.8 per cent, down from 9.4 per cent in October 2024.

Analysts attribute the better asset quality to a decline in sub-standard loans and a shift in the composition of NPLs, with a larger proportion now classified as loss loans. 

The overall reduction in the NPL ratio was supported by a 6.2 per cent contraction in the absolute stock of non-performing loans, which dropped to GH¢20.1 billion in October 2025 from GH¢21.4 billion in October 2024.

This decline reflects a combination of increased write-offs, stronger loan repayments and the appreciation of the Ghana cedi, which lowered the cedi value of certain foreign-currency-denominated exposures.

Industry observers note that while the elevated write-offs imposed short-term costs on banks, they have played a key role in gradually strengthening the sector’s underlying asset quality and resilience.