This forms part of the company’s strategy of improving its bottom line after a spike in Non-Performing Loans (NPLs) pulled its net profit to a record low last year.

The bank failed to pay any dividend to its shareholders in 2016, as its profits for the year decreased from GH¢160 million in 2015 to GH¢7 million last year.

The huge slide in profit was attributed to the rise in the bank’s NPLs, which increased from 5.5 per cent in 2015 to eight per cent in 2016, forcing the bank to write off most of the loans, thereby reducing its profit.

The Executive Director of the Bank, Mr Philip Owiredu, told the GRAPHIC BUSINESS after the company took its turn at the Ghana Stock Exchange’s ‘Facts behind the figures’ programme that its decision to now trade in government bonds was part of measures to bounce back after a poor performance last year.

“We can see that the government is raising a number of bonds now and that makes bond trading an income line that we have to look at to generate some revenue,” he stated.

He said it was, therefore, looking at how best it could enhance the skills of its staff that would be in charge in order to see a positive impact right from the initial stage.

“This should obviously add up to our non-funded revenue. This is line which we don’t have now and in the subsequent years, we will expect that it would make up a significant portion of our non-funded income,” he added.

He said the bank had also put in place steps to recover its impaired loans, which ended last year at GH¢ 199.2 million.

Re-classifying BDCs debt

The Assistant General Manager of the Cal Bank, Mr Charles Amoah, said part of the reasons the bank performed badly was the worsening of the impairments in the BDC sector, which also forced the bank to scale down new businesses in the sector.

He stated that the Bank of Ghana had also directed all the banks owed by the Bulk Oil Distribution Companies (BDC) to re-classify their loans to the BDCs due to government’s waning efforts to repay the debts.

Out of the US$383 million that the government said it was going to pay last year, he said only about US$200 million was paid.

“Out of the balance left, the government made two payments, after which no other payment has been made but there are currently ongoing discussions among all the stakeholders concerned to find a lasting solution to the issue,” he stated.

2017 first quarter performance

The bank’s profit after tax in the first quarter of 2017 dipped from GH¢ 40.9 million in the first quarter of 2016 to GH? 31.7 billion, representing a 22.3 per cent decrease.

Its cost to income ratio also increased from 39.1 per cent to 40.3 per cent, while its net interest margin also increased from 10.7 per cent to 11.6 per cent.

Customer deposits, however, increased from GH¢ 1.6 billion to GH¢ 2.3 billion, with loans and advances decreasing from GH¢ 2 billion to GH¢ 1.9 billion.

The bank’s total assets also grew from GH¢3.3 billion to GH¢3.9 billion, representing a 20 per cent increase, while its non-funded revenue also grew from GH¢31.9 million to GH¢32.2 million.