Ghanaian commercial banks wrote off GHS 394.8 million in bad loans in February 2026. This represents a 43.4% increase compared to the GHS 275.2 million written off in the same period in 2025.
These significant provisions, detailed in the Domestic Money Banks Income Statement, cover various expenses. This includes loan losses, depreciation, and bad debt expenses. The increase shows ongoing pressure on the quality of assets held by the banking sector.
This trend occurs amid broader efforts to improve financial stability. Data from the Bank of Ghana’s March 2026 Monetary Policy Report highlighted lingering asset quality risks. However, some key indicators have shown improvement. The Non-Performing Loan (NPL) ratio declined to 18.4% in February 2026. This is down from 22.6% in February 2025. Excluding fully provisioned loan losses, the NPL ratio also eased to 5.4% from 8.9% over the same period.
The Bank of Ghana’s report indicates a mixed financial landscape. It points to a decrease in the absolute stock of non-performing loans. The stock of non-performing loans fell by 5.8% to GHS 19.9 billion in February 2026. This contrasts with a 14.9% increase recorded a year earlier. This suggests that while new bad debts are still emerging, banks are actively reducing their existing backlog.
Further analysis of the NPL composition reveals that the private sector remains the primary source. The private sector accounted for 98.1% of impaired loans in February 2026. This is an increase from 96.2% in February 2025. The public sector’s share declined to 1.9% from 3.8% during the same period. This shift underscores a growing concentration of credit risk within the private segment of the economy.
The elevated write-offs will likely prompt close monitoring from financial regulators. They will assess the resilience of the banking sector. Banks may tighten lending standards in response to higher credit risk. This could impact businesses seeking financing. The concentration of bad debt in the private sector will be a key area of focus for policymakers.
This situation also puts pressure on banks to strengthen their risk management frameworks. Investors will watch for future NPL trends and credit growth. The central bank will need to balance financial stability with economic growth. Future monetary policy decisions could be influenced by these financial sector developments.