A stress test conducted by the Bank of Ghana in January 2026 revealed that the banking sector is robust to adverse macroeconomic developments.
This was due to strong capital buffers, an improving macro environment and large holdings of government instruments by banks.
However, the Bank of Ghana, warned that a deterioration in macroeconomic conditions could negatively impact asset quality and increase operational costs, but these would be offset by gains from net interest income.
The Central Bank also pointed out that the banking sector’s performance in 2025 reaffirmed its resilience amid improving macro-financial conditions.
It said the asset growth increased in December 2025 relative to December 2024, supported by higher flows from deposits and other funding sources. The strong asset growth, primarily driven by investment holdings, reflects a cautious portfolio rebalancing strategy in response to credit risk considerations.
Also, the financial soundness indicators generally improved year-on-year, except for core liquidity, which warrants close monitoring given its potential implications for short-term funding stability.
Again, the industry’s solvency position improved in December 2025 relative to December 2024, with the industry Capital Adequacy Ratio (CAR) without reliefs improving due to ongoing recapitalisation of the sector as well as sustained profitability in the industry.
Although the Non-Performing Loans (NPL) ratio moderated, asset quality concerns remain, representing an upside risk to the banking sector.
Overall, the Central Bank concluded that the banking industry’s outlook remains stable, contingent on the sector’s recapitalisation by the end of March 2026 and the implementation of Bank of Ghana’s NPL regulatory guidelines to address asset quality concerns.
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