John Awuah
Capital Adequacy Ratio (CAR) of Ghana’s banking sector increased from 14% to 17%, reflecting steady improvements in risk management and the relative economic and financial stability experienced in 2025.
Ghana Association of Banks (GAB), in its latest industry analysis of banking sector performance for 2025 measuring the financial strength of banks highlighted growth in balance sheets, risk and asset quality, liquidity and management efficiency.
The report stated that by the end of 2025, macroeconomic environment has improved significantly, with inflation dropping sharply to 5.4% while policy rate declined to 18% marking a turning point for the country’s banking sector from stabilisation toward consolidation and strategic repositioning.
It stated, “Capital Adequacy Ratio (CAR) improved from 14.5% to 17.5%, Non Performing loans (NPL’s) declined from 21.8% to 18.9%, NPL’s excluding loss category dropped sharply from 8.5% to 5% while CAR without regulatory reliefs also increased significantly from 11.3% to 17.5%.
This development, the report stated created a more supportive environment for financial intermediation and economic recovery citing the example of cost to income ratio inproving from 79.1% to 74.3%, lending rates easing to 19.17% with real GDP growth improving to 5.8%.
“Operational cost-to-income declined from 53.1% to 48.8%, ROA (Before tax) improved from5% to 5.7%, ROE (After Tax) remained stable at 30.8%, core liquid assets/total assets declined from 38.7% to 30.9%,” parts of the report stated.
The report also indicated that while core liquid Asset/short term liabilities fell from 46.3% to 37.9%, Net Interest Margin (NIM) however, fell from 14.2% to 11.5%.
According to the report, total banking sector assets expanded by 21.5% from GH¢367.8 billion in 2024 to GH¢446.9 billion in 2025, deposits also rose strongly by 17.8%, increasing from GH¢276.2 billion to GH¢325.3 billion, while total advances increased by 16% from GH¢95.7 billion to GH¢111 billion.
By Ebenezer K. Amponsah