CAL Bank confident of turnaround after weak performance
Cal Bank has assured shareholders of a strong come back in its performance in the ongoing financial year after a “significant and exceptional impairment charge” of GH¢199.2 million for last year eroded its net profit for the period to GHS7.2 million.
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In 2015, the bank’s net profit was GH¢160 million but fell to GH¢7.2 million last year due to challenges in the energy and commerce sectors of the economy.
From 5.5 per cent in 2015, its non-performing loan (NPL) ratio rose to eight per cent, prompting significant write-offs and a reduction to profit.
While acknowledging the challenges, the bank’s Managing Director, Mr Frank Brako Adu Jr, told shareholders at an annual general meeting in Accra that evidence showed that there were better prospects ahead.
“Distinguished shareholders, our profitability challenge in 2016 is surmountable,” Mr Adu Jr said at the April 26 meeting.
“I would like to reassure you that your board and management are fully committed to a turnaround. We have reassessed our risk management processes, reinvigorated our credit delivery and recovering processes to ensure we do not suffer the bane of 2016 again,” he explained.
That, he said, was supported by the fact that the fundamentals of the bank were still strong and the economy was projected to perform better this year.
Moreover, he said CAL Bank would now refocus on the private sector, strengthen its relationship with clients, as well as nurture a dedicated and focused staff to help reverse its current situation.
Rebranding CAL Bank
After 26 years in operation, the MD said there was the need for revitalisation and thus announced plans by the board and management to rebrand the bank this year.
“The object is to bring new identity and personality trait to our brand, realign and revamp the mindset of staff to our processes to enable us to serve our customers better,” he explained.
After laying a solid foundation within the last two-and-a-half decades, Mr Adu Jr said the bank was on the right pedestal towards achieving its objectives.
He stated that the bank had devised strategic initiatives that would help sustain its growth as it raced towards “being among one of the most efficient banks in the market.”
“We will continue to deliver sustainable returns to our shareholders and support economic growth and development in our niche market through effective and innovative financial intermediation,” he said.
He thus called on shareholders to have faith in the bank, the board and management as they work hard to sustain the successes achieved so far.
Digitasing services
Using the positive economic outlook for 2017 as basis, the Board Chairman of the bank, Mr Paarock VanPercy, said CAL Bank would take advantage of the stabilising macroeconomic environment to expand its products and services to more people.
It will also expand its networks to “locations where our presence will be strategic for business growth.”
He added that CAL Bank would continue to pursue and execute its priorities across the various business segments in a digital-focused ecosystem to drive profitability and create superior value for all stakeholders.
CAL Bank, which is majority owned by the Social Security and National Insurance Trust (SSNIT), currently has three subsidiaries operating in the financial sector.
Its second biggest shareholder, ADPI Holding 4, which bought into the bank in 2012, sold off its stake to Arise BV.
The share sale was completed in February this year, making it possible for Arise BV, a partnership Norfund of Norway and FMO and Robobank, both of Holland, to hold 27.69 per cent of the bank. –GB