Ecobank Liberia's NPL Ratio Falls to 8.1% — A Five-Year Low That Still Concerns the CBL

Ecobank Liberia's non-performing loan ratio declined to 8.1% in the quarter ending March 2026, the bank confirmed in its first-quarter management accounts published last week. The improvement marks a sustained recovery from a peak NPL ratio of 14.7% recorded in mid-2022, when a combination of pandemic-era loan restructurings, the post-Ebola construction sector downturn, and inadequate credit underwriting in the SME portfolio produced the highest bad debt levels the bank had seen in Liberia since its establishment. At 8.1%, the NPL ratio remains above the CBL's regulatory preferred threshold of 5%, and above Ecobank's West Africa average of 6.2%, but the trajectory is the right one.

The improvement has been driven by three factors. First, Ecobank Liberia's credit committee tightened underwriting standards substantially in 2023–2024, reducing new NPL formation while the legacy book was resolved through write-offs and recoveries. Second, the bank benefited from improved performance in its trade finance and commodity finance portfolios — loans to rubber and iron ore exporters that had been restructured during the commodity price downturn recovered as export revenues recovered. Third, macroeconomic stabilisation — lower inflation, a more stable LRD, and rising government revenue — improved the debt service capacity of the SME and individual borrower segments.

The CBL's April 2026 Financial Stability Review, however, flags a concentration risk that the headline NPL ratio does not capture. Ecobank Liberia's remaining NPL book is concentrated in three segments: commercial real estate lending in Monrovia (largely apartment developments that have stalled), contractor financing to firms dependent on government payment (where delays in county fund disbursements have cascaded into debt service difficulties), and unsecured SME lending made during the 2021–2022 credit expansion. Each of these exposures is sensitive to macroeconomic variables — property demand, government fiscal performance, small business revenue — that could deteriorate in the second half of 2026 if the government's mid-year budget review triggers further fiscal tightening.