Ghanaian banks wrote off GHS 883.7 million in bad debt during the first four months of 2026. This significant amount reflects an accounting action where lenders remove defaulted or uncollectable loans from their active balance sheets. The write-off figure marks a substantial 35.1% increase over the GHS 654.2 million recorded in the corresponding period of April 2025.
This increase in write-offs comes as banks clean up their financial statements by removing loans that are often 180 days or more past due. The total provision for these write-offs included loan losses, depreciation, and other items, as detailed in the Domestic Money Banks Income Statement. While the write-off amount grew, the banking sector also saw some positive developments regarding asset quality.
The broader context shows that asset quality risks remained elevated in April 2026. However, there was an observed improvement in the industry's Non-Performing Loans (NPL) ratio. This crucial indicator declined to 18.0% in April 2026, down from 23.6% a year earlier. This reduction suggests a healthier loan portfolio across the sector despite the higher write-off volume.
The NPL ratio, when adjusted for the fully provisioned loan loss category, also saw a decline. It fell from 9.0% to 5.6% during the same comparative period. Furthermore, the total stock of NPLs decreased to GHS 20.7 billion in April 2026, from GHS 21.7 billion recorded in April 2025. These figures indicate a positive trend in managing problematic loans.
According to the Bank of Ghana, the private sector accounted for the majority of these non-performing loans. Its proportion of NPLs rose to 98.2% in April 2026, up from 96.5% in April 2025. This is due to the private sector's dominant holdings in total credit extended by banks. Conversely, the public sector's share of NPLs declined to 1.8% from 3.5% a year earlier.
The overall decline in the industry's NPL ratio year-on-year reflects improvements in asset quality across most economic sectors. An exception was the agriculture, forestry, and fishing sector, which saw its NPL ratio increase. This sector's NPL ratio rose from 62.1% in April 2025 to 66.1% in April 2026, highlighting specific challenges within this area.
Dr. Johnson Pandit Asiama, Governor of the Bank of Ghana, has previously commented on the resilience of Ghana's economy. The central bank continues to monitor financial stability indicators closely. The mixed signals from increased write-offs and a declining NPL ratio will be key for policymakers.
Moving forward, stakeholders will closely watch how banks manage their loan portfolios. The Bank of Ghana will likely continue to implement policies aimed at strengthening the financial sector. The performance of the private sector, particularly in agriculture, will be critical for sustaining improvements in asset quality. This situation could influence future lending decisions and interest rates.