1Q22: CalBank grows loan book 21.6% year-on-year…commits to loan book quality over quantity

With the rapidly depreciating macroeconomic condition, the management of local lenders, Calbank, has insisted that it would not sacrifice the quality of its loan book on the altar of expansion.
Philip Owiredu, Managing Director, CalBank

With the rapidly depreciating macroeconomic condition, the management of local lenders, Calbank, has insisted that it would not sacrifice the quality of its loan book on the altar of expansion.

Recently-released data by the Ghana Statistical Service (GSS) indicates that inflation accelerated in April to 23.6 percent – its highest in almost two decades – driven largely by sharp rises in transportation-related costs.

This has analysts expecting an immediate reaction from the central bank at its upcoming Monetary Policy Committee meeting, with some saying an upwards adjustment to the benchmark policy rate is inevitable.

Touching on the possible implications of these developments on CalBank’s lending activities, its Managing Director, Philip Owiredu, at a Facts Behind the Figures session organised by the Ghana Stock Exchange (GSE), said his outfit is committed to a prudent allocation of its resources.

“In every environment, when interest rates start going up, the risk of default heightens… the most important thing is how we, as an institution, are cognizant of this and ensure that in our quest to grow our loan book, we are not over-enthusiastic and make loans that will come to bite us in the future, as such, we are cautious about the sectors that we will be lending to, some of businesses and sectors are still very strong and we will extend as much credit to them as we can,” he explained.

1Q22 loan book

CalBank’s results for the first quarter of 2022 show that on a year-on-year (y/y) basis, the bank had grown its loan book by 21.6 percent to GH¢2.7 billion, from the GH¢2.2 billion recorded a year earlier.

A sectoral breakdown of the loan book distribution indicates that construction remains the biggest recipient of credit from CalBank, albeit, recording a shrinkage from 26.7 percent in the first quarter of 2021 to 23.7 percent in the period under review.

The biggest casualty of the lender’s adjustments, however, was commerce and finance, which dropped from 16.1 percent to 9.6 percent, as well as lending to the Treasury. On the other hand, transport, storage and communication shot up to 14.5 percent, from 2.5 percent year-on-year. Energy, as well as mining and quarrying accounted for 8.3 percent and 2.4 percent respectively.

Net impairment losses dropped by 38.4 percent to GH¢14.4 million and this was attributed, in part, to “significant recoveries and improved quality of the stock of new loans” during the period under review.


The bank’s balance sheet remained on the positive side of the GH¢10 billion mark, closing the period at GH¢10.7 billion, representing a 35.5 percent jump y/y, whilst post-tax profit appreciated by 17.3 percent to GH¢62.7 million during the quarter. Funded income grew by 169.8 percent and this was attributed to “enhanced credit activities and electronic banking services,” whilst non-funded income hit GH¢58 million for the period, representing a 14.6percent growth.

This was, however, marginally dented by a 4.6 percent fall in net income from trading; an area Mr. Owiredu says the bank is working on growing, given the prevailing macroeconomic circumstances.

Looking forward

Despite the tight operating conditions, the GSE-listed bank maintained a more than 20 percent growth rate projection for full-year 2022, whilst expecting that its results will drive price discovery of its stocks, which is currently trading at GH¢0.87.

CalBank, its managers said, remains resolute in its digital agenda, especially as its number of agent bankers has grown 104 percent over the past year, with deposits mobilised through the agents hitting GH¢57 million; a 79 percent y/y growth.

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