NPLs increasing across all categories – BoG report
The July 2024 Monetary Policy Report of the Bank of Ghana has revealed that the banking industry’s Non-Performing Loans (NPLS) ratio rose to 24.2 per cent in June 2024, from 18.7 per cent in June 2023.
When adjusted for the fully provisioned loan loss category, the industry’s NPL ratio still increased to 10.8 per cent in June 2024, from 7.8 per cent, reflecting increasing stock of all categories of non-performing loans.
The rise in the NPL ratio during the period under review was explained by the higher growth in the NPL stock relative to the growth in total loans.
The industry’s NPL stock grew by 49.4 per cent to GH¢20.4 billion in June 2024, up from GH¢13.7 billion, reflecting a deterioration in both domestic and foreign currency-denominated loans in the period under review.
The private sector accounted for the largest share of the non-performing loans, being the largest recipient of the industry’s credit.
The proportion of NPLs attributable to the private sector rose marginally to 95.6 per cent in June 2024, from 95.5 per cent in June 2023, while that of the public sector declined to 4.4 per cent, from 4.5 per cent in a similar period last year.
The agriculture, forestry, and fishing sector recorded the highest NPL ratio of 56.4 per cent (an increase from 30.0 per cent a year ago), followed by the transportation, storage and communication sector with an NPL ratio of 49.1 per cent (from 22.1 per cent a year earlier).
The NPL ratio of the construction sector rose to 36.8 per cent (from 32.8 per cent), followed by the electricity, water and gas sector at 20.6 per cent (from 7.8 per cent), and then the commerce and finance sector unchanged at 20.2 per cent.
The mining and quarrying sector accounted for the lowest NPL ratio of 13.7 per cent in June 2024 (from 12.7 per cent a year earlier).
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