CalBank Plc, despite operating in a challenging economic environment, has declared a Profit after Tax (PAT) of GH¢140.8 million in its 2020 third quarter results, up from the GH¢135.4 million recorded during the comparable period in 2019, representing an increase of 4%.
This was contained in a statement forwarded to the Ghana Stock Exchange (GSE) on the bank’s performance during the timeframe.
Whilst Net Interest Income as well as loans and advances grew by 5.5% and 8.7% respectively Year-on-Year (YoY), Fees and Commissions witnessed a significant decrease by 24.1%. This was attributed to the bank’s inability to close major expected advisory mandates as a result of the pandemic as well as the waiving of various fees and commissions as part of COVID-19 reliefs.
But net trading income grew 164.9% on the back of an aggressive growth of fixed income trading volumes.
The bank saw its operating costs increase by 16.1% to GH¢221 million in Q3 2020 up from GH¢190.3 million over previous year, this was driven primarily by factors such as the newly introduced deposit insurance premiums, the application of International Financial Reporting Standards (IFRS 16) – which has changed the way that companies account for leases in their financial disclosures, especially their balance sheets and income statements – to leases as well as the bank’s new head office depreciation.
However, staff costs were contained, growing by 3.6% as management “increased its focus on cost control in the light of the downturn in economic and business conditions.”
From the initial panic withdrawals that characterised the earliest days of the pandemic, total deposits saw an increase from GH¢3.8 billion to GH¢4.1 billion YoY, representing a 7.9% appreciation. The bank recorded modest Earnings Per Share (EPS) gains as with a 4% appreciation to GH¢0.30 in Q3 2020 versus GH¢0.29 in 2019.
Speaking on the varied performance of the bank, Chief Executive Officer of CalBank, Philip Owiredu stated, “despite the heightened market risk, increased volatility and economic uncertainty, we delivered a resilient performance in Q3-2020, growing operating income by 10.3% and increasing balance sheet size by 5.4% on prior year.
Our capital adequacy ratio of 20.8% remains well ahead of regulatory and internal targets and liquidity is robust, both of which are expected to remain stable. We continued to make good progress on our strategy in the first nine months of the year.”
On the outlook for Q4, he stated that the uncertainty over the duration and lasting effects of the pandemic has informed the bank’s objective now of safeguarding the health and well-being of its staff, customers and communities where it operates while also protecting the integrity of our balance sheet by focusing on improved liquidity. “Our employees and customers have been the foundation of our continued success and I thank them all for their loyalty and commitment through this difficult year,” he added.
