Banking Sector Total Assets Shrink by Over GH¢5 Billion in October 2025
By Praisebell Rosemond Larbi
Ghana’s banking sector recorded a rare contraction in total assets in October 2025, signalling a shift in balance sheet dynamics as liquidity conditions tighten and economic momentum moderates. New data show that total assets fell by GH¢5.3 billion, declining from GH¢428.6 billion in September to GH¢423.3 billion in October, the first significant dip after nearly a year of consistent expansion.
The development slowed annual asset growth from 20.7% in September to 15.3% in October, suggesting that banks are adopting a more conservative posture as market conditions evolve. Analysts say the slowdown reflects a combination of factors, including tighter liquidity tied to anti-inflation measures, cautious investment decisions, and adjustments in portfolio allocations following months of aggressive balance sheet expansion.
The contraction in assets comes at a time when the broader economy is experiencing decelerating momentum. Though private-sector credit has been gradually recovering, banks appear to be managing exposures more carefully, either by reducing certain investments, tightening credit assessment conditions, or conserving liquidity to meet regulatory and market demands. The shift marks a notable change from the strong expansion trend seen throughout the past year.
Between October 2024 and September 2025, the sector’s total assets rose sharply from GH¢367.2 billion to GH¢428.6 billion, driven by strong deposit inflows, higher investments in government securities, and a gradual rebound in lending activity. Deposits and loans also mirrored this upward trajectory, reflecting improving confidence in the banking system as macroeconomic stability strengthened.
However, October’s pullback suggests that banks are recalibrating. A slight decline in deposits, coupled with reduced holdings of certain low-yielding assets, may have contributed to the overall dip. The slowdown may also mirror tighter liquidity conditions in the economy, as government borrowing requirements evolve and policy measures work to contain inflationary pressures.
Despite the contraction, the sector remains fundamentally strong. The capital adequacy ratio (CAR) continues to stay well above the regulatory threshold, providing banks with solid buffers to absorb potential shocks. Equally encouraging is the sustained improvement in asset quality. Non-performing loans (NPLs) have fallen from 23.6% mid-2025 to 19.5% in October, demonstrating enhanced recovery efforts, stricter credit risk management, and better loan performance across key sectors.
Banking sector analysts note that while the dip in assets may initially raise concerns, it does not necessarily signal weakness. Instead, it may point to a strategic consolidation phase, during which banks focus on improving asset quality, maintaining capital strength, and navigating a changing economic landscape.
With macroeconomic indicators showing gradual but uneven progress, banks are expected to balance caution with targeted lending to support growth. The coming months will reveal whether October’s decline represents a temporary correction or the beginning of a more measured growth trajectory as the sector adapts to evolving financial conditions.
