Despite the adverse economic effects of COVID-19, CalBank PLC – in the company’s audited results for 2020 – announced a Profit After Tax (PAT) of GH¢213.8million for the financial year ended December 31, 2020.
This was against the GH¢173.4million declared in 2019. The profit represented a growth of 23.3% over that of the previous accounting period. This was attributed to an increase in non-funded income and ‘disciplined cost management’.
The Ghana Stock Exchange (GSE)-listed lender also reported a Profit Before Tax (PBT) on gross earnings of GH¢284.6million for full year 2020 compared to a PBT of GH¢242.9million over the same period of 2019, representing 17.2% growth.
The size of the bank’s balance sheet size increased by 12.5% during the period, from GH¢7billion to GH¢7.9billion. This was credited to an increase in total deposits from GH¢3.9 billion to GH¢4.4 billion Year-on-Year (YoY). Evidence of customers’ confidence in the bank’s operations was seen as total deposits increased by 14.5% YoY to increase the proportion of deposits in its funding mix from 65.6% in 2019 to 67.8% in 2020.
In keeping with austere measures, the bank did not originate or grant new loan facilities during the year. There was, however, the retirement of some significant outstanding facilities. Consequently, gross advances decreased in value, by 15.4% to GH¢2.6billion from GH¢3.1billion the previous year. This resulted in a 17.8% decrease in net advances, from GH¢2.9billion at the end of 2019 to GH¢2.4billion at the year under review.
The bank also resorted to a high level provision for credit losses of GH¢86.8million, and this reflected by an increase in the non-performing loan ratio to 13.5% – an increase of 350 basis points from the 10% recorded in the year 2019. CalBank PLC ended the year with a capital adequacy ratio of 22.3%….10.8 percentage points above the revised regulatory minimum of 11.5%.
Commenting on the results, Chief Executive Officer of CalBank, Philip Owiredu said: “The Group’s performance in 2020 reflects a resilient business that delivered strong topline earnings growth, but was negatively impacted by an extraordinarily challenging operating environment… Our financial results for the year 2020 demonstrate the strength of our diversified business model even in a challenging environment”.
Subsidiary contribution
The report also outlined the contribution of CalBank PLC’s subsidiaries to the overall Group performance. It revealed that CalAsset Management Limited contributed a total of GH¢6.31million to the Group’s profitability, representing 2.9% of the Group’s PAT in 2020. Additionally, funds under management by the group increased to GH¢1.5billion from GH¢1.1million in 2019 – an increase of 36.4%.
CalNominees Limited, which manages the bank’s custody offering, increased its assets under custody by 35.45% to GH¢2.6billion from GH¢1.9billion at the end of the previous financial year. This was ascribed to increased volumes of business from existing and new clients.
The exit of CalBrokers from the capital market is expected to be completed by mid-year 2021.
While offering limited guidance to investors, Mr. Owiredu said: “The Board is pleased to recommend a dividend per share of GH¢0.11, amounting to a total pay-out of GH¢68.92million subject to approval by the Bank of Ghana. This is a clear demonstration of our commitment to delivering superior returns to our valued shareholders”.
CalBank PLC’s Annual General Meeting (AGM) for the year will be held virtually and is slated for Thursday, May 6, 2021.
