Ghana Banks Demonstrate Resilience as CAR Stabilises
By Praisebell Rosemond Larbi
Ghana’s banking sector ended 2025 on a stronger and more stable footing, with capital adequacy ratios (CAR) converging fully after the withdrawal of temporary regulatory reliefs, signalling a restoration of prudential strength following the shocks of recent years.
Latest data from the Bank of Ghana (BoG) show that the industry’s CAR stood at 17.5 per cent in December 2025, whether calculated with or without regulatory reliefs. This marks a significant turnaround from December 2024, when the CAR including reliefs was 14.0 per cent, while the fully loaded ratio without reliefs was a weaker 11.3 per cent, reflecting the lingering effects of the Domestic Debt Exchange Programme (DDEP).
The convergence of the two ratios by the end of 2025 underscores the sector’s improved capital position and its ability to operate under full prudential requirements without extraordinary regulatory support. According to the central bank, this development reflects deliberate recapitalisation efforts by banks, improved profitability, and a gradual recovery in asset quality.
The regulatory reliefs, introduced in 2023 in the aftermath of the DDEP, were designed to cushion banks against significant valuation losses on government bonds. As part of these measures, the BoG temporarily reduced the Capital Conservation Buffer from 3 per cent to zero, effectively lowering the minimum CAR requirement from 13 per cent to 10 per cent. This provided banks with breathing space to rebuild capital while maintaining financial system stability.
By December 2025, however, the central bank had fully phased out these reliefs. Data indicate that 21 out of the 23 licensed commercial banks met the fully loaded CAR requirement by the end of the year. The remaining two banks have been granted up to March 31, 2026 to attain full compliance, under close supervisory engagement.
Throughout 2025, the sector’s capital position strengthened steadily. Under the standard measure, CARs rose consistently, peaking at 20.3 per cent in May before easing in the second half of the year to settle at 17.5 per cent in December. The CAR without reliefs mirrored this trend, climbing from 11.3 per cent at the end of 2024 to the same 17.5 per cent level by the close of 2025, highlighting genuine underlying capital recovery rather than dependence on regulatory forbearance.
The BoG views the return to full prudential standards as a critical milestone in Ghana’s post-DDEP financial sector recovery. Stronger capital buffers are expected to enhance banks’ ability to absorb future shocks, support credit extension to the private sector, and play their intermediation role more effectively in a recovering economy.
With regulatory reliefs now fully withdrawn, the central bank has reiterated its commitment to maintaining a robust supervisory framework to safeguard financial stability, while encouraging banks to sustain prudent risk management and capital planning. The stabilisation of CARs, analysts say, positions the banking sector to better support economic growth as macroeconomic conditions continue to improve.
