CAL BANK LIMITED

FIRST QUARTER 2016

FACTS BEHIND THE FIGURES
Investor & Analyst Presentation
Ghana Stock Exchange
May 2016

DISCLAIMER

This report was prepared by CAL to provide background information on the Group. The report is issued for
information purposes only, especially with regards to enabling users understand the inherent potential of the
business. It is therefore not a solicitation to buy or sell the stock.
The information contained herein is subject to change and neither the bank nor its staff is under any
obligation to notify you or make public any announcement with respect to such change.
Users are hereby advised to exercise caution in attempting to rely on this information and carry out further
research before reaching conclusions regarding their investment decisions.

SPEAKERS

Mr. Frank Adu

Mr. Philip Owiredu

Managing Director

Executive Director

Mr. Joseph Ofori-Teiko

General Manager

Mr. Charles Amoah

Assistant General
Manager

Ms. Dzifa Amegashie

Investor Relations

OUTLINE

> Operating Environment

> Banking Sector Overview

> CAL Bank Overview
> FY2015 Performance of Listed Banks
> CAL Bank 1Q2016 Performance
> Share Price Evolution
> Strategy & Outlook

O P E R AT I N G E N V I R O N M E N T: G H A N A

GHANA MACRO OVERVIEW - Q1-2016

I N F L AT I O N

Headline inflation: 18.7% as at April 2016 up from 16.8% in April 2015 of

which:
Food inflation: 8.3% up from 7.2%
Non-food inflation: 24.8% up from 23.2%
Year-to-date:

FOREIGN EXCHANGE

P O L I C Y R AT E

Source: Bank of Ghana, Summary of Economic and Financial Data, May 2016

May 2016

May 2015

GHc/USD:

- 0.3%

-20.0%

GHc/GBP:

+ 2.0%

- 18.4%

GHc/EUR:

-4.7%

- 10.6%

26% up from 21% in April 2015.

Policy rate has remained unchanged since November 2015, and our
expectation is for it to remain the same

GHANA MACRO OVERVIEW Q1-2016

GDP GROWTH RATE

DEPRECIATING CEDI

6.0

USDGHS

Jan-16

USDGBP

RISING INFLATION (%)

STRAINED FISCAL POSITION (%)

25.0

April 2016:
18.7%

2015
2014
2012
2010

20.0

2013

2011

15.0

2009

46.3%
36.2%

43.8%

50.2%

53.8%

60.8%

65.3%

10.0
5.0

Public Debt/GDP

Apr-16

Jan-16

Oct-15

Jul-15

Jan-15

Apr-15

Oct-14

Jul-14

Apr-14

Jan-14

Oct-13

Jul-13

Jan-13

Apr-13

-7.8%

Oct-12

-9.5%

Jul-12

-10.1%

Apr-12

-12.0%

Jan-12

-4.0%

Oct-11

-6.5%

Jul-11

-5.8%

Apr-11

0.0

Fiscal Deficit/GDP

Sources: Bank of Ghana, Summary of Economic and Financial Data, May 2016
Ghana Statistical Service
Bloomberg

Apr-16

Oct-15

Jul-15

Apr-15

Jan-15

Jul-14

USDEUR

Oct-14

Apr-14

Jan-14

Oct-13

Jul-13

Jan-13

Apr-13

Dec-15

Nov-15

Oct-15

Sep-15

Aug-15

Jul-15

Jun-15

May-15

Apr-15

Mar-15

Feb-15

Jan-15

Dec-14

0.0

Oct-12

1.0

Jul-12

2.0

Apr-12

3.0

Jan-12

3.70

Oct-11

3.80

4.0

Jul-11

4.20

Jan-11

5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
-

4.90

4.50

Apr-11

5.0

BANKING SECTOR OVERVIEW

GHANA BANKING SECTOR INDICES Q1 -2016

The banking sector currently has 29 operating banks: 14 foreign, 3 government and 12 local banks

POLICY RATE
MARCH 2015

DEPOSITS

MARCH 2016

Y/Y

MARCH 2015

MARCH 2016

Y/Y

21.0

26.0

23.8

34.0

40.4

19.0

PERCENT

PERCENT

PERCENT

GHS Billion

GHS Billion

GHS Billion

LOANS AND ADVANCES

TOTAL INDUSTRY ASSETS

MARCH 2016

Y/Y

MARCH 2016

55.1

64.6

17.2

26.9

30.2

12.3

GHS Billion

GHS Billion

GHS Billion

GHS Billion

GHS Billion

GHS Billion

Y/Y

MARCH 2015

MARCH 2015

INDUSTRY NPL RATIO

INDUSTRY CAR

MARCH 2015

MARCH 2016

Y/Y

MARCH 2015

MARCH 2016

Y/Y

11.4

16.2

42.1

16.9

17.6

4.1

PERCENT

PERCENT

PERCENT

PERCENT

PERCENT

PERCENT

Bank of Ghana, Summary of Economic and Financial Data, January 2016 & May 2016

C A L B A N K AT A G L A N C E

10

C A L B A N K AT A G L A N C E Q 1 - 2 0 1 6
SHAREHOLDING STRUCTURE

CAL Bank
Limited
is an indigenous
bank established
in Ghana in 1990,
listed on the
Ghana Stock
Exchange

SUBSIDIARIES

EMPLOYEES

3 751
WHOLLY
OWNED

PROFESSIONAL
STAFF

25 93 15
ATMs

FRANK BRAKO
ADU, JR
2.2%

CENTUM
EXOTICS
2.7%

FRONTAURA
3.0%

SSNIT
33.2%

ICAM
3.9%

OTHERS
25.8%

CHANNELS

Branches

DANIEL OFORI
2.5%

ADP I HOLDING 4
27.7%

PARTNERS

Active Corr.
Banks

MARKET INFORMATION

ISSUED SHARES

MARKET VALUE

PUBLIC FLOAT

548.26

548.26

36.74

MILLION

MILLION CEDIS

PERCENT

1. As at 31/03/2016

11

FY2015 PERFORMANCE OF LISTED BANKS

12

CAL RANKS HIGH AMONGST LISTED BANKS IN 2015

PROFIT-AFTER-TAX (GHS mn)
350.0

CUSTOMER DEPOSITS (GHS mn)

321.3

300.0

6,000.0

254.6

5,000.0

4,838.0

250.0
4,000.0

166.2

200.0
150.0

3,000.0

66.1

100.0
50.0

44.6

2,422.4
1,544.5 1,395.8

2,000.0
1,000.0

0.0
-50.0

3,360.6

EGH

GCB

CAL

SCB

SOGEGH

-100.0

HFC
-36.3

UTB
-44.6

EGH

8,000.0

3,500.0

6,691.8

SCB

CAL

SOGEGH

UTB

HFC

3,117.9

3,000.0

6,000.0

2,500.0

4,659.2

5,000.0

GCB

LOANS AND ADVANCES (GHS mn)

TOTAL ASSETS (GHS mn)

7,000.0

1,073.0 882.9

1,805.3

2,000.0

3,369.4 3,364.5

4,000.0
3,000.0

1,493.2
1,219.5

1,500.0

2,002.7 1,963.8

2,000.0

1,600.3

1,067.8

1,000.0

911.5

828.0

SOGEGH

HFC

500.0

1,000.0
-

EGH

Source: Company Financials

GCB

SCB

CAL

SOGEGH

UTB

HFC

EGH

CAL

GCB

SCB

UTB

13

CAL RANKS HIGH AMONGST LISTED BANKS IN 2015

RETURN ON EQUITY

RETURN ON ASSETS
6.0%

50.0%
40.0%

5.0%

36.1%

32.0%

16.9%

20.0%

4.9%

3.0%

11.9%

2.2%

2.0%

SOGEGH

SCB

2.0%

10.0%

1.0%

0.0%

EGH

CAL

GCB

SOGEGH

SCB

HFC

UTB

-20.0%

0.0%
-1.0%

-18.6%

-30.0%

GCB

CAL

EGH

-3.0%

-50.0%

HFC

UTB

-2.3%

-2.3%

-2.0%

-40.0%

-47.6%

-60.0%

COST-TO-INCOME RATIO
140.0%

4.8%

4.0%

29.8%

30.0%

-10.0%

5.5%

COST OF FUNDS
20.0%

120.3%

18.6%

18.0%

120.0%

16.0%

100.0%

14.0%

78.5%

80.0%

10.5%

12.0%

62.2%
49.3%

60.0%

10.4%

10.0%

44.0%

42.8%

40.0%

35.9%

8.0%
6.0%

4.3%

4.0%

20.0%

3.8%

3.2%

3.2%

2.0%

0.0%

0.0%

UTB

HFC

SOGEGH

GCB

EGH

SCB

CAL

UTB

CAL

HFC

SCB

SOGEGH

EGH

GCB

14

CAL RANKS HIGH AMONGST LISTED BANKS - FY 2015

NET INEREST MARGINS

NON PERFORMING LOANS

25.0%

50.0%

21.0%

43.3%

45.0%

20.0%

40.0%

15.2%
15.0%

35.0%

13.4%

12.9%

30.0%

11.4%

25.0%

9.5%

10.0%

20.0%
15.0%

3.8%

5.0%

10.0%

14.0%

14.8%

GCB

SOGEGH

20.4%

21.1%

UTB

HFC

16.6%

5.5%

5.0%
0.0%

0.0%

GCB

SCB

EGH

HFC

SOGEGH

CAL

UTB

CAL

CAPITAL ADEQUACY RATIO

P.E.

30.0%
25.0%

24.0%
21.4%
17.8%

20.0%

16.1%

15.4%

15.0%

13.3%
8.7%

10.0%

5.0%

CAL

EGH

SOGEGH

SCB

HFC

UTB

HFC (7.37)

SCB

UTB

EGH

(1.02)

3.39
2.31

CAL

3.30

HFC

GCB

3.94

GCB

1.18

1.37

EGH

6.41

SOGEGH

1.11

SOGEGH

6.59

CAL

1.06

(10.00)

28.46
-

10.00

SCB

P.B.

SCB

0.0%

GCB

EGH

20.00

30.00

UTB

0.49
-

2.00

4.00

15

CAL BANK Q1-2016 PERFORMANCE

16

Q 1 - 2 0 1 6 U N A U D I T E D C O N S O L I D AT E D I N C O M E S TAT E M E N T
KEY ITEMS (GHS 000)

1
Profitability

1Q2016

1Q2015

Y/Y CHANGE

Net Interest Income

75,420

56,172

34.3%

Net Fees & Commissions

18,520

17,084

8.4%

Net Trading Income

10,315

17,275

(40.3)%

Other Income

3,113

4,075

(23.6)%

Total Income

107,368

94,606

13.5%

Credit Loss Expenses

(4,946)

(5,228)

(5.4)%

Net Operating Income

102,422

89,378

14.6%

Total Operating Expenses

(41,972)

(31,493)

33.3%

Profit before tax

60,450

57,941

4.3%

Profit after tax

40,860

40,519

0.8%

Net Interest Income growth of 34.3% y/y attributable to commensurate growth in loans and advances.
Trading income fell by 40.3% due to weak trading volumes from overall slowdown in business/trading activity and
strengthening/stability of local currency in Q1-2016 relative to previous year.

Key facts

Credit Loss Expense decreased by 5.4% due to enhanced supervision by loan monitoring teams and vigorous pursuit of
recoveries in 2016 to recover some classified corporate loans.
Total Operating Expenses growth of 33.3% y//y due to :
General inflationary increases in cost of all goods & services;
Increased staff costs due to cost of living adjustments to remuneration and to retain staff;
Opening of 3 new branches in 2015 + expenses ahead of new Airport City branch opened in February 2016.

17

I N C O M E S TAT E M E N T E V O L U T I O N 2 0 1 4 - 2 0 1 6

NET INTEREST INCOME GHS 000s

80,000.0

NON- FUNDED INCOME GHS 000s

CREDIT LOSS EXPENSE GHS 000s

5,250.0

75,420.0
38,,434

70,000.0

5,200.0

10.3
60,000.0

31,948

56,172.0
27,708

5,228.0

9.7

5,150.0

5,141.0

5,100.0

50,000.0
12.8

40,107.0

43.8

5,050.0
32.3

40,000.0

5,000.0

30,000.0

56.5

4,946.0

4,950.0

20,000.0
4,900.0
45.9

58.0

10,000.0

4,850.0
30.6

4,800.0

1Q2014

1Q2015

1Q2016

1Q2014
Other Income

1Q2015

1Q2016

1Q2014

1Q2015

1Q2016

Net Trading Income

Net Fees & Commissions

18

I N C O M E S TAT E M E N T E V O L U T I O N 2 0 1 4 - 2 0 1 6
COST-TO-INCOME RATIO %

45.0%

NPL RATIO %

NET-INTEREST MARGIN %

9.0%

39.1%

40.0%
35.0%

12.5%

8.1%

7.0%

31.1%

12.2%

8.0%

33.3%

30.0%

6.0%

25.0%

5.0%

20.0%

4.0%

12.0%

7.0%

11.5%

11.4%

4.8%

11.0%
15.0%

3.0%

10.0%

2.0%

5.0%

1.0%

0.0%

10.8%
10.5%

0.0%
1Q2014

1Q2015

1Q2016

10.0%
1Q2014

1Q2015

1Q2016

1Q2014

1Q2015

1Q2016

19

Q 1 - 2 0 1 6 U N A U D I T E D C O N S O L I D AT E D B A L A N C E S H E E T
KEY ITEMS (GHS 000)

1Q2016

1Q2015

Y/Y CHANGE

Loans and Advances to Customers

1,966,110

1,466,761

34.0%

311,284

895,014

(65.2)%

Investments in Government Securities

Other Assets

Balance Sheet

841,201

661,084

27.2%

Fixed Assets

157,024

84,625

85.6%

Total Assets

3,275,619

3,107,484

5.4%

Total Deposits

1,658,810

1,406,581

17.9%

Borrowings

933,277

1,174,867

(20.6)%

Other Liabilities

123,034

85,522

(43.9)%

Shareholders' Funds

560,498

440,514

27.2%

3,275,619

3,107,484

5.4%

Total Liabilities and Shareholders Funds

Total Assets grew marginally by 5.4% y/y to due considerable reduction in investment in Government securities.
Loans & Advances growth of 34% mainly in corporate sectors - Commerce/Finance and Electricity, Water & Gas .

Key Facts

Fixed Assets grew with the opening of 3 new branches over the period and as the new Head Office Building project
progresses.
Customer deposits increased by 17.9% y/y as branch network increased to 25 branches. Deposit growth was dampened by
more intense competition amongst banks for deposits over the period as inflationary pressures hit .
Borrowings decreased by 20..6 % as a number of short term-facilities to support asset growth were retired.

20

ASSET PROFILE 2014-2016

INTEREST EARNING ASSETS DOMINATE
100%

1.1%

80%

32.8%

1.8%

2.1%
26.0%

43.2%

60%
40%

66.1%

71.9%

55.1%

20%
0%

1Q2014

1Q2015

Loans & Advances

1Q2016

Other Interest Bearing Assets

Other Assets

SECTORAL DISTRIBUTION OF LOANS

Q1 2016

Q1 2015
Transport, Storage
& Communication
2%

Services
12%

Miscellaneous
6%

Commerce &
Finance
18%
Government
18%
Electricity, Gas &
Water
14%

Construction
23%

Transport, Storage
& Communication
2%
Commerce &

Miscellaneous
5%

Services
9%

Finance
22%
Government
12%

Agriculture,
Forestry &
Finishing
<1%
Mining &
Quarrying
3%

Manufacturing
4%

Electricity, Gas &

Water
22%

Agriculture,
Forestry &
Finishing
<1%
Mining &
Quarrying
3%

Construction
21%

Manufacturing
4%

21

C A P I TA L & R E T U R N S 2 0 1 4 - 2 0 1 6

RETURN ON AVERAGE EQUITY

45.0%

42.9%

CAPITAL ADEQUACY RATIO

42.9%
25.0%

40.0%

32.7%

35.0%

22.0%

22.5%

22.0%

30.0%

25.0%

20.0%

20.0%

1Q2014

1Q2015

1Q2016

RETURN ON AVERAGE ASSETS

8.0%

7.6%

7.0%

17.5%

17.2%

15.0%

12.5%

6.7%
5.1%

6.0%

Regulatory Minimum: 10%

10.0%

5.0%
4.0%
3.0%

7.5%

2.0%
1.0%

5.0%

0.0%

1Q2014

1Q2015

1Q2016

1Q2014

1Q2015

1Q2016

22

Thousands

C A L S H A R E P R I C E E V O L U T I O N J A N 2 0 1 5 - M AY 2 0 1 6
5,000

1.40

4,500
1.20
4,000

Volume Traded

3,000

0.80

2,500
0.60

2,000
1,500

0.40

1,000
0.20
500
Jan-15

Mar-15

May-15

Jul-15

Sep-15
Volume

Nov-15

Jan-16

Mar-16

0.00
May-16

Last Price

23

Share Price (GHS)

1.00

3,500

PRICING EVOLUTION 2014-2016

PRICE-TO-BOOK RATIO

1.35x

1.01x

3.36x

3.59x

4.60x

1.70x

PRICE-TO-EARNINGS RATIO

1Q2014

1Q2015

1Q2016

1Q2014

1Q2015

1Q2016

24

2 0 1 6 - 2 0 1 8 S T R AT E G Y & O U T L O O K

Retail Banking

Corporate
Banking

People

Develop e-payment platforms with emphasis on digital channels.

Leverage on growing card schemes to offer diversified card services for enhanced customer experience, positively
impacting on our customer base and translating into increased deposits.

Promote financial inclusion by deploying digital solutions to offer branchless banking services.

Refresh existing products and services by leveraging on enhanced technology to improve customer experience and
market competitiveness.

Employ cutting-edge technology to deliver enhanced tailor-made solutions for our corporate customers to offer them
convenience and real-time banking.

Enhance forex generating capacity to ensure we meet forex needs of our customers.

Enhance relationship management and product knowledge.

Implement a comprehensive performance management and reward systems.

Deepen staff skills and knowledge.

Develop and implement structured career progression and succession planning program.

Enhance organizational competence.

Implement workplace health and safety program.

Leverage on growth in digital and mobile technology to develop cutting edge solutions that will offer customers

convenience and also reach out to the unbanked.

Technology

Enhance transaction and process efficiency through technology.

Continuous and sustained investments in technology to ensure development of up-to-date, efficient products and
services.

Risk Management &

Compliance

Enhance loan monitoring and early-detection toolkits to improve quality of loan portfolio.

Maintain low NPL ratio.

Continuously develop risk management and compliance culture amongst staff through training and other staff
engagements.

Ensure adherence to regulatory requirements and best practice compliance procedures.

25

THANK YOU

Q&A

26