CAL Bank to maintain lower NPLs
The Executive Director for CAL Bank, Mr Philip Owiredu, says the bank is aiming to keep its ratio of Non Performing Loans (NPL) below 10 per cent.
Advertisement
CAL Bank’s NPL ratio increased from 5.80 per cent in 2013 to 8.60 per cent in the third quarter of 2014 and Mr Owiredu said the bank was putting in place measures to keep it below 10 per cent in the next quarter in spite of the numerous challenges that businesses faced within the economy.
Mr Owiredu made the pledge when the bank took its turn at the Ghana Stock Exchange (GSE) ‘Facts Behind the Figures’ on November 5, in Accra.
Explaining the reason for the marginal increase in the bank’s NPLs, he said the increase was a result of the downgrade of classified accounts to a lower grade.
“However, security is held for these loans and we continue to monitor to ensure clients are current with the restructured servicing of such credits,” he said.
The unadjusted NPL ratio for the banking sector in the third quarter of 2014, however, declined to 12.3 per cent compared to 12.9 per cent in the corresponding period last year.
Since last year, the ratio of non-performing loans (NPL) within the banking industry has been gradually decreasing, according to the periodic reports of the Monetary Policy Committee (MPC) of the Bank of Ghana.
For the current year, the MPC report noted that the NPL ratio declined to 12.8 per cent in May 2014 compared to 13.4 per cent in May 2013, while NPLs (less loss provisioning) ratio remained broadly unchanged at 5.3 per cent.
On the bank’s performance, Mr Owiredu pointed out that the total assets of the bank grew by 56.9 per cent year on year supported by a 151.2 per cent in investment in government securities with total volume on loans and advances increasing to GH¢591.8 million.
He said the investment in government securities increased as a result of planned strategy to maximise returns on excess liquidity resulting from increased deposits.
Fixed assets of the bank grew by 44.1 per cent, mainly from purchase of capital assets in relation to branch expansion programme and revaluation, while customer deposits increased by 25 per cent year-on-year driven by targeted deposit mobilisation efforts and deepening of existing relationships.GB