UBA Ghana reported a non-performing loan (NPL) ratio of 2.1 percent at the close of 2025, marking the lowest among selected lenders. This strong performance stands in stark contrast to state-owned Agricultural Development Bank (ADB) and National Investment Bank (NIB), which continue to struggle with severely impaired credit portfolios.
The Ghana Association of Banks' Consolidated Banks' Audited Financial Statements for 2025 revealed this significant divergence. ADB recorded an NPL ratio of 70.5 percent, while NIB ended the year at 69.7 percent. These figures mean that roughly seven out of every 10 cedis in their loan books were not being repaid as agreed. Such high ratios indicate deep credit stress within these state-owned institutions.
This uneven recovery highlights a critical challenge within Ghana’s broader economic landscape. While some private banks demonstrate robust risk management and loan recovery, state-owned entities face persistent issues. This situation can hinder the overall financial sector's ability to support economic growth. It also raises questions about the effectiveness of governance and commercial mandates for state-controlled banks, impacting their capacity to lend to vital sectors of the economy.
The Norvan Reports article, which cited the Ghana Association of Banks' data, emphasized the striking divergence in underwriting performance. It also pointed to differences in loan recovery practices and legacy exposures across the industry. Such high NPL ratios can significantly weaken a bank's earnings due to impairment charges. They also consume regulatory capital, limiting the bank's ability to provide new financing to businesses and individuals.
Looking ahead, the wide disparity in NPL ratios will likely prompt closer scrutiny from banking regulators and investors. The Bank of Ghana will need to monitor these trends carefully to ensure financial stability. State-owned banks like ADB and NIB may require further capital injections or significant operational overhauls to improve their asset quality. Their capacity to support national development initiatives will remain constrained until these credit issues are resolved. The market will watch for signs of sustained improvement or further deterioration in loan portfolios across the sector.
While UBA Ghana's 2.1 percent NPL ratio is exemplary, other private banks also showed varying degrees of loan quality. Fidelity Bank Ghana recorded an NPL ratio of approximately 6.1 percent. Guaranty Trust Bank Ghana followed with 7.1 percent. Zenith Bank Ghana and Access Bank Ghana closed 2025 at 8.5 percent and 9.2 percent, respectively. These figures suggest a group of banks entered 2026 with relatively healthy loan portfolios, though some saw increases from the previous year.
For example, Access Bank's NPL ratio rose sharply from 2.1 percent in 2024 to 9.2 percent in 2025. Zenith Bank's ratio increased from 1 percent to 8.5 percent, and GTBank's climbed from 2.4 percent to 7.1 percent. These movements reflect new defaults, slower loan growth, or weaker repayment conditions. Supervisors must assess both the level and trajectory of bad loans to understand a bank's true financial health. CalBank, however, showed significant improvement, reducing its NPL ratio from 47.5 percent in 2024 to 17 percent in 2025. This 30.5-percentage-point reduction indicates meaningful balance-sheet repair. Prudential Bank also reduced its ratio from 74 percent to 57 percent, and Universal Merchant Bank's NPL ratio fell from 54.9 percent to 52.3 percent. These improvements are positive, but these institutions still have more than half of their loan portfolios classified as non-performing. Prudential Bank recently secured a GHS 1.13 billion strategic capital investment from Bloom Africa Holdings Ghana Limited, which should strengthen its capacity to absorb risk and support further recovery efforts. This highlights the ongoing need for capital support and cautious lending to fully restore balance sheets across the sector.