Cal Bank has recorded a GHc255.6 million as profit before tax in the third quarter of 2021. This compares favourably with the GHc202.6 million it recorded in 2020.
The Bank’s after-tax profit stood at GHc170 million up from GHc140 million representing a year-on-year growth of 20.92% for the period. Its operating income also increased from GHc495.4 million to GHc555.7 million during the same period.
The Bank’s profit for Q3 2021 translates into earnings per share of 0.36 pesewas for shareholders subject to a dividend approval by the bank’s Board of Directors.
Cal Bank also witnessed increment in the value of its assets. The value of its assets went up to GHc8.66 billion in Q3 2021 from GHc7.59 billion in Q3 2020.
The growth figures were contained in the Bank’s third quarter financial statement which was presented at the Facts Behind the figures programme organized by the Ghana Stock Exchange.
Deposits from the bank’s customers increased by 37.5%, rising from GHc 4.15 billion to GHc 5.7 billion in Q3 2020 and Q3 2021 respectively.
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Meanwhile, the loan asset quality of CAL Bank Plc for the period between Q3 2020 and Q3 2021, recorded a modest deterioration as non-performing loans of the bank increased under the review period.
Non-performing loans (NPLs) of the bank per its Q3 2021 Financial Statement, increased from 8.96% in Q3 2020 to 13.7% in Q3 2021, indicating a 4.8 percentage points increment in NPLs. NPL is a bank loan that is subject to late repayment or is unlikely to be repaid by the borrower in full. Non-performing loans represent a major challenge for the banking sector, as it reduces the profitability of banks, and is often presented as preventing banks from lending more to businesses and consumers, which in turn slows down economic growth.
The Bank’s NPL coverage ratio which essentially sets the loan loss reserves set aside by banks against the NPL volumes increased from 75.3% in 2020 to 90% in 2021.
The modest increment in the bank’s NPLs can be attributed to the Covid-19 pandemic-induced debt repayment challenges faced by businesses and households.
That notwithstanding, the liquidity ratio of the bank increased from 65.4% in Q3 2020 to 78.6% in Q3 2021. While, Return on Average Assets (ROAA) increased from 2.6% in 2020 to 2.7% in 2021. Return on Average Equity (ROAE) also increased from 18.5% to 19.2% during the same period.
It is however instructive to note that Bank’s cost of funds ratio also increased 6.4% to 6.8% during the period under review.