CalBank returns to path of profitability… After incurring GH₵800m loss in 2022

CalBank, an indigenous bank, made a loss of GH₵809.8 million in the 2022 financial year as a result of the bank’s participation in the Domestic Debt Exchange Programme (DDEP), the Managing Director, Philip Owiredu, has stated.

Posting a profit after tax of GH₵222.9 million in 2021, the bank incurred a loss of about GH₵809.8 million in 2023, representing a decrease of 463.4 per cent in net profit.

However, the Managing Director said the first quarter of 2023 results indicated that the bank had returned to the path of profitability, posting a net profit of GH₵63.1 million.

Mr Owiredu stated this in Accra on Friday via zoom during the bank’s turn of the fact-behind-the-figures series of the Ghana Stock Exchange (GSE) to present the 2022 full year and first quarter 2023 financial results to shareholders and the investing public.

He said the bank incurred an impairment loss of GH₵1 billion from its investment in government bonds, and also lost GH₵150 million in the bank’s participation in government Eurobonds.

In view of the loss, the Managing Director stated that the bank could not declare dividend for shareholders in the 2022 financial year.

Mr Owiredu disclosed that the bank before the end of the year would raise additional capital to finance its operations.

“Even though the Bank of Ghana (BoG) has given banks three years to recapitalise as a result of the DDEP, CalBank is willing to recapitalise before the end of the year,” Mr Owiredu stated.

Asked of the timeline for the recapitalisation and how much the bank intend  to raise, the Managing Director said the bank was yet to engage the board of directors, shareholders and stakeholders on the issue to decide  when to go the market and how much to raise.

He added that the financial performance and profitability of the bank this year would also influence the recapitalisation exercise and how much capital would be enough to finance the operations of the bank.

Also quizzed about the form of capital to raise, Mr Owiredu explained “there were various options” indicating that the banks would rely on relatively cheap debt capital to recapitalise.

The Managing Director of CalBank said the bank would leverage on its digital and electronic platforms to raise capital to fund the operations of the company.

Mr Owiredu said in spite of the loss in the 2022 financial year, the fundamentals of the bank were strong and the bank was poised for profitability and growth.

The Executive Head in charge of Administration and Finance of CalBank, Thomas Boansi-Sarpong, who gave highlights on the 2022 financial performance of the bank, said net interest income went up to 26 per cent from GH₵469.5 million in 2021 to GH₵592.7 million in 2022.

Loans and advances, he said, also rose to 42.4 per cent from GH₵2.2 billion in 2021 to GH₵3.2 billion in 2022.

Mr Boansi-Sarpong said total deposits inched up to 6.8 per cent from GH₵6.3 billion in 2021 to GH₵6.7 billion in 2022.

BY KINGSLEY ASARE