13 Banks meet recapitalization targets as others fall short
A significant number of Ghanaian banks have recovered from capital deficits incurred during the Domestic Debt Exchange (DDE), with 13 banks now meeting or exceeding their recapitalization targets, according to the latest International Monetary Fund (IMF) Country Report.
These banks, the report indicates, are on course to achieve the regulatory Capital Adequacy Ratio (CAR) of 13.0 percent without regulatory relief by the end of 2025, owing largely to strong profitability and support from the Ghana Financial Stability Fund (GFSF).
However, the IMF raised concerns about a few banks including one state owned bank that are materially behind schedule. These banks are struggling to meet their recapitalization obligations, hampered by delays in shareholder capital commitments, high levels of nonperforming loans (NPLs), and slow recognition of credit losses and provisioning requirements flagged during the Bank of Ghana’s 2023 asset quality reviews.
“Despite shareholders’ and or GFSF capital injections, a few banks are materially behind on their recapitalization schedule,” the IMF report noted.
The Bank of Ghana (BoG) has responded with heightened supervision and remedial actions for five private and state owned banks that failed to comply with the end December 2024 recapitalization timeline. These banks are implementing updated capital recovery plans that have been accepted by the central bank.
“These banks are subject to intensified BoG monitoring and corrective measures to accelerate recapitalization plans to reach CAR of 13 percent by end 2025,” the report stated.
The underperforming banks are also expected to address legacy operational weaknesses, as well as more recent slippages in performance.
The IMF noted that parliamentary approval and implementation of the World Bank funded segment of the GFSF would be instrumental in helping the struggling banks meet their capital targets.
However, this is contingent on these banks securing adequate private or state capital injections to qualify for access under the World Bank funding rules.
The IMF reiterated that recapitalization is a critical pillar of financial stability, especially in the post DDE recovery period, as banks are expected to play a central role in Ghana’s broader economic recovery.
The overall banking sector outlook has improved, with profitability metrics rebounding and liquidity levels stabilizing. Banks that met recapitalization thresholds are expected to lead the sector’s role in funding private sector growth, public infrastructure financing, and restoring market confidence.
Still, the IMF cautioned that persistent recapitalization delays among local banks especially those with state involvement pose risks to the financial system’s resilience.
The Bank of Ghana has vowed to maintain pressure on defaulting institutions while facilitating the deployment of fiscal and technical resources to close the capital gaps without compromising regulatory standards.
