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The share price of CalBank Plc, one of the listed financial equities on the Ghana Stock Exchange (GSE), exhibited volatility throughout the year 2023.
Starting at GH¢0.60 per share in January 2023, the bank’s share price dropped marginally to GH¢0.48 per share by the end of the year in review.
The performance of the bank comes at a time when in the same year, the GSE market recorded a mixed performance, with the GSE Composite Index ending the year with a gain of 28.1 per cent.
However, the Financial Stock Index ended the year with a year-on-year loss of 7.4 per cent, with most listed banks witnessing a decline in share prices, reflecting the persisting difficulties in the economic landscape according to the bank’s Board Chairman, Joe Rexford Mensah, in his annual report posted by the GSE.
Mr Mensah said the government’s Domestic Debt Exchange Programme (DDEP) “has necessitated that CalBank improves upon its regulatory capital position to continue the effective execution of its growth strategy.
On June 8, 2023, the bank secured shareholders’ approval to raise GH¢600 million in new capital “to restore our capital to enable us to continue to deliver long-term value to its shareholders.”
The board chairman said the bank’s major shareholders had been fully supportive of the capital raise exercise and the board was poised to restore the bank’s capital by the end of this year following due regulatory process.
By way of dividends, Mr Mensah said, “Considering the directive from the Bank of Ghana as part of reliefs to banks to address the impact of participating in the government’s domestic debt exchange programme and the significant impairment posted in 2023, the board does not recommend the declaration and payment of dividends and other distributions to shareholders.”
In his report, acting Managing Director, Carl Selasi Asem, for his part said CalBank Group was steadfast in its commitment to delivering value to its shareholders and all stakeholders.
“The group’s performance, though less than satisfactory, can primarily be attributed to the lingering impact of the 2022/23 domestic debt exchange programme.
The challenging operating environment further exacerbated the situation, leading to a substantial credit impairment provision of GH¢1.3 billion during the 2023 financial period. Despite these challenges, the group remains resilient and dedicated to overcoming hurdles for the benefit of its stakeholders.”
Mr Asem said despite the unsettling economic landscape, the bank remained steadfast in supporting the national recovery effort across both the private and the public sectors, leading the agenda for a prosperous growth.
He said in the face of these economic challenges, the bank adeptly took advantage of market opportunities, resulting in a steady 11.9 per cent increase in deposits from GH¢6.7 billion in 2022 to GH¢7.5 billion by the close of 2023.
“This strong deposit growth can be attributed to our commitment to optimising our digital channels, effectively reducing our cost of funding and enhancing our non-funded income streams,” he said.
Explaining the bank’s position on the loss posted for the year in review, Mr Asem said the far-reaching consequences of the bank’s involvement in the DDEP in 2022 could not be overstated.
Our top-line revenue stream was significantly impacted. Amidst a challenging macroeconomic environment and the potential adverse effects on borrowers, we diligently examined the credit portfolio per IFRS 9. Consequently, we made significant additional provisions for credit impairments on our top 50 credit exposures, adopting a
prudent approach to safeguard against potential risks.
This led to the group reporting a loss before tax of GH¢946.3 million in 2023, compared to a loss before tax of GH¢1.1 billion in the previous year.
“Similarly, the group recorded a loss after tax of GH¢671.2 million in 2023, as compared to a loss after tax of GH¢809.8 million for the financial year 2022.”
On the bank’s outlook for the years ahead, Mr Asem said the bank had developed a new five-year strategy to rank among the top-tier banks in Ghana, adding that, that resolve remains unchanged.
“Over the next five years, we will deepen the gains and successes we have chalked up in previous years. Considering the significant investments we have made in our digital transformation drive, our strategic imperative is to become the leading bank for digital payments and innovation in the country.
“Exceeding customers’ expectations will continue to drive every strategic initiative we execute. We are committed to sustainable growth, so we are deepening our retail franchise and pursuing opportunities within key economic sectors,” he added.
He said recognising the pivotal role of digitalisation, the bank was prioritising the swift expansion of its digital footprint, ensuring the provision of seamless and secure payment channels.
“At the core of our strategy is the establishment of resilience through robust risk management and proactive contingency plans. We will optimise operational efficiency by streamlining processes and leveraging advanced technologies to enhance our agility.” Mr Asem added.
