With economic recovery underway, indigenous financial services provider, CalBank has said it is poised to extend additional lending to the real economy in the medium-term, with the services sector, in particular, is expected to be the biggest beneficiary.
This comes after a number of banks – CalBank included – pulled the purse strings in the third quarter as they tried to protect their balance sheets following a steady decline in rates and fiscal concerns over the nation’s debt sustainability.
However, speaking at a facts behind the figures session organised by the Ghana Stock Exchange (GSE), the bank’s Managing Director, Philip Owiredu expressed optimism that his outfit will be able to grow its loan book – which shrunk by 18.15% year-on-year, from GH¢2.69 million to GH¢2.1 million – in the coming financial quarters.
“We are targeting the services industry, we will take opportunities to if they should come in the agric sector because we are developing that side of our book, we will do some direct government lending if the numbers look good,” he said. “We will do a bit of manufacturing, and also look to the healthcare sector as well.”
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A look at CalBank’s loan book distribution, by sector, for the period showed construction in pole position with 29.6%; followed by Services (17.4%); Transport, Storage and Communication (16.8%); Commerce and Finance (11.3%) and Energy (7.6%). The rest are Manufacturing (6.6%), Mining and Quarrying (1.7%) and all others (8.9%).
KPIs
According to CalBank’s statement for the quarter, net interest income decreased by 10.0% Y-o-Y, attributed to the 30.5% decrease in interest from loans and advances. The bank cited, in part, a 12.9% reduction in gross loans due to the sell-down of some significant loans in the last quarter of 2020, as well a drop in the Ghana Reference Rate (GRR) from 14.77% in September 2020 to 13.46% at the end of September 2021 for the decrease in interest on loans and advances.
On a more positive note, CalBank, on account of a 37.5% growth in deposits, saw its total assets increase fromGH¢7.6 billion to GH¢8.7 billion. This was an increase of 13.9% during the period under review. The period also saw pre-tax and post-tax profits rise by 26.2% and 20.9% respectively, as total income also jumped by 12.2% YoY, to GH¢577.76 million.
Share price
Addressing concerns over the relatively low price of the bank’s shares compared to its earning potential, Mr. Owiredu was upbeat that the bank’s performance, which has led to a rally on the bourse, will further translate to an appreciation of the share price to adequately reflect its value.
CalBank shares began the year with a price of GH¢0.69 GHS and in the second week in November, is trading at GH¢0.82, representing an 18.8% gain. It ended the third quarter as the second most traded stock on the GSE.
