Cal Bank meets minimum capital

Cal Bank has met the GH¢400 million Minimum Capital Requirement of the Bank of Ghana (BoG).

The bank on Monday convened an extraordinary general meeting where it sought the approval of shareholders to transfer GH¢50 million out the GH¢166.5 million income surplus to stated capital to meet the new MCR.

Earlier in April this year, the bank also sought the approval of shareholders to transfer GH¢250 million from income surplus to the bank’s already GH¢100 million stated capital, thus bringing the stated capital of the bank as at April to GH¢350 million.

The move to increase the bank’s capital up to GH¢400 million is to meet the new capitalisation requirement of the Central Bank.

The BoG in September 2017, issued a directive to all banks to meet a new MCR of GH¢400 million by the end of December 2018 and the banks could do that through fresh injection of capital, capitalisation of income surplus, mergers and acquisition and a combination of the above.

Speaking at the extraordinary general meeting, the chairman of the Board of Directors of Cal Bank, Paarock VanPercy said after the BoG’s directive for banks to recapitalise, the Board of Directors of Cal Bank recommended to meet the MCR solely through the capitalisation of income surplus as that did not require shareholders to inject fresh capital into the bank.

The Board Chairman indicated that Cal Bank as of November this year per its unaudited financial results had recorded a profit after tax of GH¢157.5 million as against the prior year period amount of GH¢130.1 million, stressing that the feat was achieved through an improvement in operating income of 16.8 per cent and a cost to income ratio of 42.2 per cent.

“Overall, there were improvements in most revenue lines coupled with prudent management of our operating expenses and in our impairment charge recording a reduction of 1.6 per cent compared with the previous year,” he said.

Total assets of the bank, Mr VanPercy said increased from GH¢4.2 billion as at December 31, 2017 to GH¢5.3 billion, an increase of 26.2 per cent.

“Shareholders’ equity at the end of the period amounted to GH¢760.6 million compared to the previous year’s amount of GH¢647.4 million, an increase of 17.5 per cent as a result of retained earnings. Included in shareholders’fund is an amount of GH¢166.5 million representing the income surplus balance at the end of November 2018, which is adequate to cater for the GH¢50 million required for the transfer to stated capital to meet the MCR, for which we seek approval,” he said.

The Managing Director of Cal Bank, Frank Brako Adu Jnr in an interview said that his outfit set itself to meet the MCR through its own funds and the bank had just delivered that.

He said the bank had been able to meet the MCR through its own resources without borrowing.

“The new MCR will enable us to deliver on our strategy,” he said, adding that “another area of focus of Cal Bank next year will be retail banking driven by technology.”

By Kingsley Asare

 

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