Banks' credit risk remain elevated - Governor Asiama

Governor Asiama of the Bank of Ghana has reported that Ghana's banking sector remains robust, profitable, and liquid, with asset quality showing signs of improvement. In August 2026, the sector's total assets rose by 20.5 percent from the previous year, reaching GH¢500.2 billion, driven by increased deposits and other funding sources.

The Capital Adequacy Ratio also improved to 19.1 percent in August 2026, up from 18.3 percent in August 2025. The NonPerforming Loan (NPL) ratio decreased to 15.7 percent in August 2026, down from 20.8 percent, indicating better asset quality despite a strong recovery in credit growth.

However, credit risk remains elevated among banks. Dr. Asiama emphasized that banks should follow NPL guidelines to maintain confidence in the financial system. On monetary matters, reserve money expanded significantly by 29.7 percent year-on-year in August 2026, compared to 4.5 percent in August 2025. This growth was driven by an increase in net domestic assets, largely due to changes in reserve requirements.

Nevertheless, net foreign assets fell, which helped temper the overall increase in reserve money. The money supply, or broad money, expanded by 20.4 percent in August 2026, up from 16.6 percent in August 2025.

Interest rates on government short-term instruments have decreased. The 91-day Treasury bill rate fell to 5.4 percent in August 2026 from 10.3 percent a year earlier. The average lending rate for banks also declined to 15.9 percent in August 2026 from 24.2 percent in the same period last year. The low-interest rate environment, combined with more lenient credit policies by banks and rising credit demand, has led to higher credit growth in the sector.

Private sector credit growth rebounded to 35.5 percent in August 2026, up from 13.3 percent in August 2025, reflecting a real growth rate of 29.0 percent compared to 1.7 percent in the same period last year.