A few banks are facing larger capital gaps mainly on slow progress in implementing recapitalisation plans and increased non-performing loans (NPLs), the International Monetary Fund has warned in its 4th Review Under the Extended Credit Facility (ECF) programme. “The BoG [Bank of Ghana] has continued its multi-pronged efforts to address increasing NPLs, although the NPL-to-total loan ratio decreased from 26.7 to 21.8% between end-March and end December 2024 due to a faster expansion in nominal credit. It however pointed out that the banking sector capital adequacy is improving amid strong liquidity and profitability, as most of the banks with post-domestic debt exchange (DDE) capital deficits are on course to restore a capital adequacy ratio (CAR) of 13% without reliefs by end-2025 including with the support of the Ghana Financial Stability Fund (GFSF). Meanwhile, a stress test carried out by the Bank of Ghana on banks operating in Ghana indicated that some banks were vulnerable to severe impairments in credit. However, credit risks were well-contained. According to the Central Bank, risks emanating from adverse exchange and interest rates movements, as well as liquidity pressures, were also well-contained due to a tight limit on net open position, sound management of maturity mismatches, and sufficient liquidity.