CAL Bank hints of recapitalisation ahead of BoG’s order
Cal Bank has told its shareholders it will “likely initiate a corporate action to raise more capital this year” despite ending 2016 with a minimum capital in excess of GH¢100 million.
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The additional capital will be needed to ensure that the bank meets Bank of Ghana’s (BoG) new recapitalisation figure, to be announced later in the year.
CAL Bank’s Managing Director, Mr Frank Brako Adu Jr, gave the hint in Accra when he addressed shareholders at this year’s annual general meeting (AGM).
The announcement is expected to prepare the bank’s shareholders, led by the Social Security and National Insurance Trust (SSNIT) and Arise BV, a Netherlands-based equity firm, to explore ways they can use to invest in the bank to help raise its minimum capital to the required amount.
In 2012 when BoG asked banks to recapitalise, ADPI 4, an investment company, came to the aid of CAL Bank in return for a 27.69 per cent stake.
The firm has since February 9, this year sold off its stake in the bank, raising questions over whether the new round of recapitalisation will see further dilution of the bank’s shareholding structure or existing shareholders will be able to raise the needed amount.
Dividend postponed
The Board Chairman of CAL Bank, Mr Paarock VanPercy, said at the AGM that his outfit and the management had decided not to recommend the payment of dividend this year.
He said the move was on the back of the bank’s “reduced profitability and the need to preserve its capital base and ensure compliance with regulatory requirements”
Last year, high provisioning for bad loans eroded the bank’s profit, causing it to fall from GH¢160 million in 2015 to GH¢7.2 million.
Mr VanPercy said his outfit was confident that “2017 will turn out a better year and we will return to the era of consistent dividend payment.”
With the business environment expected to improve after last year’s rigidities, the board chairman said the bank had positioned itself properly to take advantage of the opportunities that will arise.
He said it would do this by expanding its innovative products and service offering and networks to where they would be needed mostly.
He hinted that the bank would also “aggressively” recover its impaired loans, which ended last year at GH¢199.2 million.