Ghana’s banking sector has recorded its first significant asset contraction in months, with total assets falling by 5.3 billion cedis in October 2025, according to banking sector data.
The decline brought total assets from 428.6 billion cedis in September to 423.3 billion cedis in October, marking a reversal after sustained expansion throughout most of the year. This represents the first notable monthly drop following months of steady growth across the banking industry.
Annual asset growth also moderated, slowing from 20.7 percent to 15.3 percent, suggesting increased caution among financial institutions. The slowdown occurs amid tighter liquidity conditions and ongoing monetary policy measures aimed at maintaining price stability.
Industry observers note that even as private sector credit begins to recover, the asset contraction suggests banks may be trimming certain exposures or managing cash positions more conservatively. Economic momentum has decelerated in recent months, and financial institutions appear to be responding accordingly.
Throughout 2024 and into early 2025, Ghana’s banking sector experienced robust expansion. Total assets soared from 367.2 billion cedis in October 2024 to a peak of 428.6 billion cedis in September 2025, representing nearly 17 percent growth over that period. Deposits and loan portfolios followed similar upward trajectories during this expansion phase.
Despite the October contraction, Ghana’s banking sector maintains strong fundamentals. Capital adequacy ratios remain healthy across the industry, exceeding the Bank of Ghana’s (BoG) regulatory minimum of 13 percent. The industry average capital adequacy ratio stands around 17 percent, providing a substantial buffer above prudential requirements.
Non-performing loan ratios have declined to 19.5 percent in October 2025 from 22.7 percent in October 2024, demonstrating improved asset quality despite the asset contraction. The improvement represents a reduction of 3.2 percentage points within twelve months, driven by enhanced credit recovery efforts and stronger risk management practices.
Bank of Ghana Governor Dr Johnson Asiama addressed the sector’s performance at the 127th Monetary Policy Committee press conference on 26 November 2025. He stated that deposit money banks remain sound, profitable and well capitalised, with financial soundness indicators showing relative improvement in year on year terms.
“The financial soundness indicators, including solvency, profitability, asset quality, and efficiency indicators all point to relative improvement in year on year terms,” Dr Asiama noted at the briefing.
The banking sector’s resilience reflects successful navigation of challenges stemming from Ghana’s Domestic Debt Exchange Programme (DDEP), which was completed in 2023. The restructuring of government bonds significantly affected financial institutions, prompting both regulatory interventions and market adjustments throughout 2024 and into 2025.
According to the UBA Africa White Paper published in October 2025, Ghana’s banking sector has re-established itself as one of the most capitalised in West Africa following the recovery from the debt restructuring shocks. The report highlighted that Tier 1 banks have rebuilt their capital positions above regulatory minimums.
Profitability across the banking sector improved substantially during the first half of 2025. Banking industry profit after tax increased by 32.6 percent to 7.2 billion cedis in June 2025, compared with the previous year, according to the Bank of Ghana’s July 2025 Monetary Policy Report. Interest income and other revenue lines contributed to the higher growth in profit.
Shareholders’ funds in the banking sector soared to 48.0 billion cedis in the first half of 2025, marking a 48.5 percent year on year increase, according to the Bank of Ghana’s Banking Sector Development Report. The rise reflects improved profitability and recapitalisation efforts by previously undercapitalised institutions.
However, Dr Asiama cautioned that credit risks remain elevated despite the improvement in non-performing loan ratios. The Bank of Ghana has introduced regulatory measures aimed at further reducing NPLs and has indicated plans to cap the non-performing loan ratio at 10 percent by December 2026.
The asset structure of banks has shifted noticeably during 2025. Investments including bills, securities and equities replaced cash and bank balances as the largest component of total assets. The share of investments rose to 42.3 percent from 33.2 percent in June 2024, reflecting strategic rebalancing toward higher yielding opportunities.
The October asset decline comes during a period of significant monetary policy adjustments. The Bank of Ghana reduced its monetary policy rate by 350 basis points to 18 percent in November 2025, following several rate cuts earlier in the year aimed at supporting economic growth while maintaining inflation control.
Analysts suggest the asset contraction may be temporary, reflecting seasonal factors or portfolio adjustments rather than structural weakness. The sector’s strong capital buffers, declining NPLs, and improved profitability provide a foundation for renewed expansion as macroeconomic conditions stabilise further.
Ghana’s banking sector comprises 23 universal banks, with 14 at least partially foreign owned, representing almost 60 percent of banking system assets. The sector accounts for 75.6 percent of total financial system assets, cementing its position as the dominant pillar of Ghana’s financial system.
The International Monetary Fund is expected to approve Ghana’s fifth programme review in December 2025, paving the way for a 385 million dollar disbursement to bolster foreign reserves. The review process will examine Ghana’s fiscal consolidation progress and financial sector stability measures implemented throughout the year.