The World Bank reported that Ghana’s banking sector in 2024–2025 experienced significant asset growth and stronger capital. However, high credit risks and a preference for government securities restricted lending to the private sector.
The World Bank noted that the banking sector’s performance in 2024 showed signs of a steady recovery from the macroeconomic difficulties experienced in 2022.
From 2022 to 2025, the period saw significant asset growth, a notable move toward liquidity and government securities, ongoing asset quality issues, and careful lending practices. These interconnected trends were influenced by macroeconomic conditions, risk perceptions, and policy measures, shaping the sector’s development and its impact on the broader economy, it suggested..
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Banks Favoured Government Securities
Nonetheless, the banks overwhelmingly favored government securities, and by early 2025, over 99% of bank investments were in government securities, with the share of short-term treasury bills rising sharply from 26.3% to 40.3%.
According to the Bretton Woods institution, the preference for treasury bills over longer-term securities reflected concerns about duration risk and policy uncertainty, as well as the attractive returns offered by high T-bill rates—consistently above 26%.
The World Bank said this investment strategy had several implications.
First, it contributed to the crowding-out effect, as banks’ preference for government securities reduced the availability of credit for the real economy, limiting support for inclusive growth.
Second, it shaped profitability as banks maintained a stable Return on Assets (5.6%) and a high average Return on Equity (32.2% in half-year 2025), but these returns were driven mainly by safe assets rather than organic credit expansion.
It warned that the high Non-Performing Loans continued to constrain the sector’s ability to grow capital organically.
Regulatory Front
The World Bank noted improvements in the sector’s capital adequacy, with the Capital Adequacy Ratio (CAR) increasing from 13.6% in February 2024 to 15.9% in March 2024, before stabilizing at 14.3–14.4% by February 2025. However, some banks still faced undercapitalization challenges, dealing with pressure as regulatory forbearance approaches its expiration in December 2025.
Last Updated on August 16, 2025 by Samuel Kwame Boadu
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Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.
