Banks’ credit profiles improve on stronger operating environment – Fitch

Ghana's improved creditworthiness is positively impacting the credit profiles of local banks, according to rating agency Fitch. The UK-based firm raised Ghana's Long-Term Issuer Default Ratings (IDRs) to 'B'/Positive from 'B-'/Stable in May, citing a significant decline in government debt to Gross Domestic Product (GDP) and a rise in international reserves.

This positive outlook predicts ongoing fiscal responsibility and further strengthening of external buffers. Fitch highlighted that falling inflation, low interest rates, a stable exchange rate, and robust real GDP growth indicate a stabilized economic environment, with economic impacts from the Iran conflict also contained. The banking sector's capitalization has recovered from the sovereign debt restructuring initiated in December 2022, bolstered by strong profitability driven by high interest rates.

At the end of June 2026, the banking sector's total capital adequacy ratio stood at 20.4%, exceeding the 10% minimum requirement, and most banks exited regulatory forbearance introduced following the sovereign default by the end of 2025. Fitch noted that impaired loans ratio in the sector has decreased from 23.1% at the end of 2025 to 16.1% in the first half of 2026 due to strong credit growth and improved economic conditions.

The firm anticipates further reduction in impaired loans ratio as banks write off loans to meet the 10% prudential impaired loans ratio limit starting from the end of 2026. Fitch upgraded Guaranty Trust Bank (Ghana) Ltd and United Bank for Africa Ghana Ltd to 'B'/Positive from 'B-'/Stable, along with elevating their operating environment scores, attributing this to the sovereign upgrade and the high correlation of their credit profiles with Ghana's due to their significant holdings of government securities.