BoG Governor directs banks to reduce Non-Performing Loan ratio to 10% by end of 2026

The Governor of the Bank of Ghana (BoG), Dr. Johnson Pandit Asiama, has reiterated the central bank’s directive requiring all regulated financial institutions to reduce their Non-Performing Loan (NPL) ratios to no more than 10 per cent by the end of December 2026.

Speaking at a forum on Non-Performing Loans and Post-Commencement Financing organised by the Chartered Institute of Restructuring and Insolvency Practitioners (CIRIP) Ghana in Accra on Tuesday, August 4, the Governor said although the banking sector has recorded significant improvements, bad loans remain a major concern.

According to him, the industry’s NPL ratio declined to 16.1 per cent in June 2026 from 23.1 per cent a year earlier, while the Capital Adequacy Ratio stood at 20.4 per cent.

“We can have this conversation now, because the banking sector is in a stronger position than it was. The industry’s Non-Performing Loan ratio declined to 16.1 per cent in June 2026 from 23.1 per cent a year earlier, while the Capital Adequacy Ratio stood at 20.4 per cent,” Dr. Asiama said.

Despite the improvement, he stressed that further action is required.

“But that is progress, not sufficiency, and 16.1 per cent remains too high. Our regulatory measures require each regulated institution to reduce its ratio to no more than 10 per cent by the end of December 2026, alongside stronger credit appraisal, Board-approved reduction plans, effective recovery functions and the write-off of fully provisioned exposures with no realistic prospect of recovery,” he stated.

The Governor warned that persistently high levels of bad loans tie up capital, increase recovery costs, and limit the ability of banks to extend fresh credit, particularly to small and higher-risk businesses.