Third Quarter 2024 Unaudited Results & Commentary

Accra, Ghana – 30th October 2024

CalBank PLC (GSE “CAL”), is pleased to announce its unaudited financial results for the 9-months ending September 30, 2024, showcasing another quarter of significant, sustained growth across key performance metrics in line with the bank’s turnaround strategy.

Carl Asem, CEO of CalBank highlighted the Bank’s solid performance in Q3-2024 as follows:

Key earnings drivers: “CalBank Group closed the Third Quarter 2024 with a clear, sustained positive trend in performance following the Bank’s sterling Half-Year 2024 results. Our Q3-2024 financials reflect an increase of 97.4% in Fees and Commissions income. The 24.7% decrease in Net interest income was largely due to a deliberate slowdown in new loan creation, given high interest rates and non-performing loans in the industry. Consequently, Total Operating Income decreased by 9.8% compared to the prior year Q3-2023.

Recoveries: The muted headline revenue performance was countered by a significant recovery of impaired loans, amounting to GHS 712.5 million from the beginning of the year 2024 to the end of Q3-2024. These recoveries were principally from the Hospitality, Construction and Services sectors as a result of a sustained and unrelenting recovery strategy for impaired loans which was pursued via the courts as well as through liquidation of certain collaterals held.

Disciplined cost containment: Operating expenses increased by 9.3% in Q3-2024 over the prior year, driven largely by general price increases in goods and services. Staff costs were well contained, growing by 9.7% over the prior year. This was due to management’s sharpened focus on cost control in the light of the current economic and business conditions and local currency depreciation which contributed to rising costs of US dollar denominated expenses

Profitability: Against this backdrop, CalBank reported a solid bottom-line performance of GHS 223.9 million in Profit-After-Tax for Q3-2024, an increase of 26.1% over the prior year and a 41.8% increase over the HY-2024 Profit-After-Tax.

Deposit growth: Through our strong retail franchise, deposits growth has been remarkable throughout 2024 resulting in a steady 26.5% increase from GHS7.5 billion at FYE 2023 to GHS 10.1 billion as of Q3-2024. This growth has been coupled with a dramatic shift in our deposit mix from Corporate to Individuals/SMEs. As a result, Current and Savings accounts (CASA) now make up over 80% of deposits, mainly from individuals and SME’s.

Digital penetration: The change in deposit mix has arisen directly from our strategic drive to optimize our digital channels, grow our agent banking franchise and enhance our collection platforms. The deposit increase also underscores customer trust and confidence in CalBank’s secure and reliable banking platforms.

Outlook for Full Year 2024

“Our clear focus remains on the disciplined execution of our new 5- year strategy, geared towards maximizing value across our business. The strategic objective to rank amongst the top tier banks in Ghana remains unchanged.

Our long-term retail strategy is focused on expanding our presence nationwide and in the short term, our focus is to enhance and solidify our digital footprint. To this end, in Q3-2024, we registered 996 new agents, bringing our total agent network to 1,886, spread across all 16 regions of Ghana. We will continue to expand this delivery channel through 2024/2025 and beyond in line with our retail strategy. Across all channels, our business activity levels have shown resilience, setting a positive tone for the last quarter of 2024. In the long-term, our key imperative is to become the leading bank for digital payments and innovation in the country.

Our aggressive deposit drive strategy is yielding the desired results in shifting our deposit mix towards low-cost current and savings accounts and provides the foundation upon which we will continue to grow our deposits in 2024.

We are firmly committed to supporting businesses and individuals in key strategic sectors of the economy through our SME and Scheme loan lending initiatives.

At the core of our strategy is the strengthening of resilience through robust risk management, which supports sustainable long-term growth and delivers strong financial returns while prioritizing prudent risk management and community support. Our Q3-2024 results highlight the fundamental strength of the Bank and our ability to navigate challenges, as we recorded a profit of GHS 223.9 million.

I must express my appreciation to the management and staff for their continuous hard work and tenacity during these difficult times. I wish to applaud and show special appreciation to our current board of directors and those who have recently completed their term of service. Together, we have turned the fortunes of the bank around towards growth.

The Bank remains resilient, dedicated to overcoming hurdles and delivering sustainable growth and value for the benefit of investors, clients, and colleagues.”

Chairman Mr. Joseph Mensah also commented: “The turnaround of CalBank’s performance towards a positive trajectory has come about due to the ongoing restructuring efforts by management and the board. The fundamentals of the bank have been strengthened and the outlook for the future is very bright. We are well-positioned to continue on our pathway to success.”