NPLs Expected to Decline Further– Dr. Asiama
The Governor of the Bank of Ghana, Johnson Asiama, has indicated that Ghana’s banking sector is expected to record a further decline in non-performing loans (NPLs) as recently introduced regulatory and supervisory measures begin to take effect.
Speaking after the conclusion of the central bank’s 130th Monetary Policy Committee (MPC) meeting in Accra, Dr. Asiama said the outlook for asset quality within the banking industry remains positive, supported by reforms aimed at strengthening credit risk management and improving lending practices across commercial banks.
According to him, policy interventions introduced by the central bank are already beginning to reinforce discipline within the sector and support improvements in loan portfolio performance.
“We expect that the non-performing loans ratio will go down further for commercial banks due to some of the guidelines that have been put in place,” he stated.
The Governor explained that the Bank of Ghana remains focused on sustaining financial sector stability through tighter supervision, stronger prudential oversight and enhanced risk management frameworks.
He noted that banks are being encouraged to strengthen internal credit assessment processes and improve loan administration systems to reduce future loan defaults and preserve balance sheet strength.
“The banking sector remains broadly stable, well-capitalised and liquid despite the challenges experienced over the past few years,” Dr. Asiama added.
His comments come amid continued recovery within Ghana’s financial sector following recent economic reforms and broader efforts to rebuild confidence after periods of elevated credit risk and market stress.
According to the Governor, the implementation of the new prudential guidelines is expected to support commercial banks in reducing bad loan accumulation while strengthening overall financial performance.
He stressed that regulatory compliance remains central to sustaining gains achieved in the sector.
“We will continue to strengthen supervision and ensure that banks comply fully with the regulatory framework to safeguard confidence in the financial system,” he emphasised.
Dr. Asiama further noted that improving macroeconomic conditions are contributing to stronger operating conditions for banks and creating an environment that supports better repayment performance among borrowers.
He added that the central bank will continue to monitor developments across the industry to ensure emerging risks are addressed early and financial institutions remain resilient.
Lower NPL ratios are generally viewed as a positive indicator of banking sector health, as they reflect improved loan recovery, stronger borrower performance and reduced pressure on banks’ capital positions.
Market analysts say sustained reductions in non-performing loans could improve credit expansion, lower provisioning costs and strengthen the ability of financial institutions to support private sector growth and broader economic activity.
The Bank of Ghana has maintained that continued regulatory discipline, effective supervision and sound credit practices will remain critical to preserving financial stability and supporting long-term growth in Ghana’s banking sector.
