CalBank defies odds, reports significant profitability resurgence
Story: Isaac AIDOO, Accra
CalBank Limited has reported a significant resurgence in profitability by the third quarter of 2024, reflecting its resilience amid Ghana’s challenging economic landscape. The bank’s profit before tax surged by 26% year-on-year to GHS 343.5 million.
Addressing stakeholders at the Ghana Stock Exchange’s “Facts Behind the Figures” session, Managing Director Carl Selasi Asem credited CalBank’s agility in navigating market complexities, specifically pointing to the strength of its earning asset portfolio, which rebounded despite the effects of Ghana’s Domestic Debt Exchange Program (DDEP) I & II in 2022 and 2023.
Robust Balance Sheet Growth
By the close of Q3-2024, CalBank’s balance sheet had grown to GH₵12.3 billion, marking a substantial increase from GH₵10.23 billion at the same time last year and GH₵9.9 billion at the end of FY 2023. Investment securities saw a 26.8% year-on-year increase, a rise attributed to increased short-term placements in response to strengthened liquidity. Meanwhile, Loans & Advances fell by 25.3%, settling at GH₵2.5 billion due to loan recoveries and repayments of performing loans.
Total deposits also showed strong growth, rising to GH₵10.1 billion by Q3-2024—an increase of 26.5% over Q3-2023 and 36% from the FY 2023 level of GH₵7.4 billion. This growth is largely credited to the bank’s digitalization strategy, which has attracted more customers to its low-cost current and savings accounts.
Positive Impairment Gains
CalBank also recorded a significant turnaround in impairment figures, with net impairment gains on financial instruments reaching GH₵232.7 million by Q3-2024, up from GH₵63 million during the same period in 2023. Management attributed this improvement to efforts to strengthen its credit portfolio, recovering GH₵207 million from previously written-off accounts, and realizing a further GH₵25.7 million from bond impairments linked to DDEP involvement.
Revenue and Operational Cost Challenges
Despite profitability gains, CalBank’s total income fell by 9.8% to GH₵6,172 million, primarily due to lower yields from its investment portfolio. However, the bank recorded a 97% increase in net commissions and fees, reaching GH₵157.2 million due to growth in its digital offerings and services. Operating expenses rose by 9.3% year-on-year as inflationary pressures and local currency depreciation drove costs higher, with total expenses reaching GH₵445.9 million by the close of Q3-2024.
Strategic Focus and Resilience These results showcase CalBank’s strategic focus and resilience in Ghana’s complex economic environment. Mr. Asem emphasized the bank’s commitment to leveraging digitalization and operational efficiencies, enabling CalBank to enhance its offerings, expand its customer base, and improve liquidity management. This strategic approach underscores CalBank’s capacity to thrive in an increasingly competitive and digitally driven market, positioning the bank for sustained growth as it moves into the final quarter of 2024.
