half year 2017 results management presentation · 2020. 3. 8. · cal bank limited is an indigenous...

Facts Behind the Figures

HALF YEAR 2017 RESULTS

MANAGEMENT PRESENTATION

AUGUST 2017

Facts Behind the FiguresFacts Behind the Figures

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.

Disclaimer


Management Team | Speakers

Mr. Frank B. Adu Jnr

Managing Director

Mr. Philip Owiredu

Executive Director

Mr. Joseph Ofori-Teiko

General Manager

Mr. Charles Amoah

Assistant General Manager

Ms. Dzifa Amegashie

Head, Investor Relations


OUTLINE

01 Operating Environment: Ghana

02 Banking Sector Overview

03 Cal Bank “At A Glance”

04 Cal HY2017 Performance vs. Listed Peers

05 Cal Bank HY2017 Performance

06 Share Price Evolution

07 Strategy & Outlook


Section 01

OPERATING

ENVIRONMENT

GHANA


GHANA MACRO OVERVIEW - HY2017

I N F L A T I O N D E C L I N I N G

18.4% in June 2016

15.4% in Dec 2016

12.1% in June 2017

C E D I S T A B I L I T Y

Year-to-date1:

July 2016 July 2017

GHS/USD: -3.8% -3.9%

GHS/GBP: +8.9% -11.3%

GHS/EUR: -5.1% -17.5%

P O L I C Y R A T E D E C L I N E

21.0% in July 2017

25.5% in January 2017

Policy rate has declined since November 2016.

Outlook is for further decline following easing in inflationary pressures.

Source: Bank of Ghana, Summary of Economic and Financial Data, July 20171As at July, 2017



0.0

5.0

10.0

15.0

20.0

25.0

Jun

-11

Au

g-1

1

Oct

-11

Dec

-11

Feb

-12

Ap

r-1

2

Jun

-12

Au

g-1

2

Oct

-12

Dec

-12

Feb

-13

Ap

r-1

3

Jun

-13

Au

g-1

3

Oct

-13

Dec

-13

Feb

-14

Ap

r-1

4

Jun

-14

Au

g-1

4

Oct

-14

Dec

-14

Feb

-15

Ap

r-1

5

Jun

-15

Au

g-1

5

Oct

-15

Dec

-15

Feb

-16

Ap

r-1

6

Jun

-16

Au

g-1

6

Oct

-16

Dec

-16

Feb

-17

Ap

r-1

7

Jun

-17

5.40

4.103.80 3.60

3.904.40

1.30

3.90 4.10

6.60

Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17

GDP GROWTH RATE (%)

DECLINING INFLATION IN HY2017

Headline inflation drops to 4-year low of 12.1% in June 2017 on the back of policy tightness and relative currency stability

GDP growth picks up in 2017, due to increased crude oil production and growth recovery in the agriculture, industry and trade sectors

Source: Bank of Ghana, Summary of Economic and Financial Data, July 2017Bloomberg



Relative currency stability compared to HY 2017 when demand pressures resulted in some depreciation of the Cedi. However, the Cedi has

since recovered in 2017 YTD

FISCAL POSITION (%)

36.2%46.3% 43.8%

50.2% 53.8%60.8%

72.2% 73.3%66.2%

-5.8% -6.5% -4.0% -12.0% -10.1% -9.5% -6.7% -8.7%-1.5%

2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 *

Public Debt/GDP Fiscal Deficit/GDP

3.00

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17

USDGHS EURGHS GBPGHS

CEDI PERFORMANCE

Fiscal deficits narrowing due to improved macro economic performance and tighter expenditure & procurement control

Source: Bank of Ghana, Summary of Economic and Financial Data, July 2017

Bloomberg


Section 02

BANKING SECTOR

OVERVIEW


GHANA BANKING SECTOR INDICES HY2017

The banking sector currently has 361 operating banks: 18 foreign, 3 government and 15 local banks

ΔY/Y

19.2PERCENT

JULY 2017

21.0PERCENT

JULY 2016

26.0PERCENT

MONETARY POLICY RATE

ΔY/Y

24.6PERCENT

MAY 2017

53.2GHS Billion

MAY 2016

42.7GHS Billion

TOTAL DEPOSITS

ΔY/Y

27.2PERCENT

MAY 2017

84.1GHS Billion

MAY 2016

66.1GHS Billion

TOTAL ASSETS

ΔY/Y

16.2PERCENT

MAY 2017

36.5GHS Billion

MAY 2016

31.4GHS Billion

TOTAL LOANS & ADVANCES

ΔY/Y

12.4PERCENT

MAY 2017

21.7PERCENT

MAY 2016

19.3PERCENT

NON-PERFORMING LOAN RATIO

ΔY/Y

3.6PERCENT

MAY 2017

16.0PERCENT

MAY 2016

16.6PERCENT

CAPITAL ADEQUACY RATIO

The monetary policy rate has been on a declining trajectory sinceNovember 2016, which is in line with the Government’s agenda toimprove access to credit

The sharp increase in the NPL ratio is due to increased loanimpairments, largely from the energy sector

Sources: Bank of Ghana, Summary of Economic and Financial Data, July 20171The Beige Bank, The Construction Bank, GHL Bank, Heritage Bank, Omni Bank, Premium Bank and Sovereign Bank received banking licenses within the last 12 months


Section 03

CAL BANK “AT A GLANCE”


CAL BANK “AT A GLANCE” HY2017

15Active Corr.

Banks

ISSUED SHARES

548.26 MILLION

MARKET VALUE

493.44GHS MILLION

PUBLIC FLOAT

36.74PERCENT

27Branches

92ATMs

CHANNELS

SHAREHOLDING STRUCTURE

MARKET INFORMATION¹

EMPLOYEES

792PROFESSIONAL

STAFF

CAL Bank Limited

is an indigenous bank established in Ghana in 1990,

listed on the Ghana Stock

Exchange

SUBSIDIARIES

4WHOLLY OWNED

PARTNERS

SSNIT36.9%

ARISE B.V. 30.8%

ICAM4.3%

CENTUM EXOTICS

3.0%

FRANK BRAKO ADU, JR

2.7%

FRONTIER MARKET OPPORT

MAST1.7%

OTHERS20.1%

1. As at July 28, 2017


Section 04

CAL HY2017

PERFORMANCE

VS.

LISTED PEERS


OVERVIEW OF LISTED BANKS - GHANA

B AN K I N G S E C T O R O U T L O O K

• The banking industry’s performance is

expected to pick up with the

improvement in the energy supply; on-

going fiscal consolidation reflected in

lower treasury bill rates

• Expected mergers and acquisitions to be

driven by maturation of investments by

financial investors and the proposed

increase in bank capitalisation to GHS

250 – 300 million

• Increases in the middle income class is

expected to boost the retail segment of

the sector as they will require more

banking services

B A N K T I C K E R

Access Bank Ghana * ACCESS

Agricultural Development Bank* ABD

CAL Bank CAL

Ecobank Ghana EGH

Ghana Commercial Bank GCB

HFC Bank HFC

Societe Generale Ghana SOGEGH

Standard Chartered Bank Ghana SCB

UT Bank UTB

* Most recently listed banks


CAL VERSUS LISTED PEERS - HY2017

PROFIT-AFTER-TAX (GHS mn)

TOTAL ASSETS (GHS bn)

149.6

211.6

187.6

66.3

40.9

6.2

26.417.5

158.7142.0

105.8

73.5

50.6 49.9

28.2 26.5

SCB EGH GCB CAL SOGEGH ADB ACCESS HFC

HY2016 HY2017

6.7

5.0

4.0

3.3

2.4 32.2

1.7

8.5

6.3

4.54.1

3.42.8 2.6

1.9

EGH GCB SCB CAL ADB ACCESS SOGEGH HFC

HY2016 HY2017

Source: Company Filings

UTB has not reported HY2017 results as of yet



LOANS AND ADVANCES (GHS bn)

CUSTOMER DEPOSITS (GHS bn)

4.7

3.6

2.7

1.51.8 2

1.5 1.3

6.0

4.6

3.2

2.4 2.4

1.9 1.91.6

EGH GCB SCB CAL ADB ACCESS SOGEGH HFC

HY2016 HY2017

3.6

2.0

1.5

1.1 1.01.3

1.1 1.0

3.4

1.9

1.4 1.41.2 1.2 1.1

0.9

EGH CAL GCB SCB SOGEGH ACCESS ADB HFC

HY2016 HY2017





RETURN ON AVERAGE EQUITY (Annualized)

RETURN ON AVERAGE ASSETS (Annualized)

7.8%

2.5%

4.2%

7.6%

6.3%

1.0%

2.2%

3.9%

7.5%

4.2% 4.0% 3.7% 3.7% 3.4%2.9%

2.1%

SCB SOGEGH CAL GCB EGH ADB HFC ACCESS

HY2016 HY2017

49.0%

20.9%

52.3%

15.3%

27.4%

7.3%

43.9%

24.6%

43.6%41.4%

33.0%

27.9% 26.2%23.7%

21.0%

12.7%

SCB SOGEGH EGH HFC CAL ADB GCB ACCESS

HY2016 HY2017




CAL VERSUS LISTED PEERS -HY2017COST-TO-INCOME RATIO

COST OF FUNDS

11.6%10.5%

12.3%

17.8%

2.7% 3.0%3.6% 3.4%

11.2% 11.4%

8.8% 8.8%

5.4%

3.1% 2.9% 2.9%

HFC CAL ADB ACCESS GCB SCB SOGEGH EGH

HY2016 HY2017

78.7%

86.6%

48.8% 49.3%

60.2%

44.4%41.5%

26.1%

76.5%69.2% 68.4%

64.9%

55.3% 49.0%

39.7%

19.8%

HFC ADB GCB ACCESS SOGEGH EGH CAL SCB

HY2016 HY2017





NET INTEREST MARGINS

13.9%

21.9%

18.…

23.8%

11.4%

20.7%

11.2%

24.0%

21.2% 20.1%

17.2%15.7%

14.1% 13.8%12.3%

10.5%

SOGEGH GCB EGH ADB HFC SCB CAL ACCESS

HY2016 HY2017

LOANS TO DEPOSIT RATIO

135.8%

66.8% 62.6%

45.1%

76.4%

91.4%

40.3% 41.7%

78.6%

66.3% 64.0% 60.3% 57.5% 55.5%

42.1%

29.7%

CAL SOGEGH ACCESS ADB EGH HFC SCB GCB

HY2016 HY2017





NON PERFORMING LOANS

CAPITAL ADEQUACY RATIO

51.7%

35.7%

25.7%

20.2%

13.1%

6.1%

17.5%

41.8% 41.3%

20.0%

14.3% 14.0% 12.6% 11.7%

SCB ADB ACCESS SOGEGH GCB CAL EGH

HY2016

25.3%

21.1% 20.7%

7.4%

13.3% 13.6%

11.3%

26.0%

23.7%

20.3%18.2%

15.8%

10.9% 10.8%

GCB SCB CAL ADB SOGEGH EGH ACCESS

HY2016 HY2017




Section 05

CAL BANK HY2017

PERFORMANCE


HY 2017 – UNAUDITED INCOME STATEMENT

Profitability

1

KEY ITEMS (GHS ‘000) HY2017 HY2016ΔY/Y

(%)2Q2017 1Q2017 ΔQ/Q (%)

Net Interest Income 162,815 144,335 12.8 89,789 73,026 23.0

Net Fees & Commissions 23,189 31,346 (26.0) 12,958 10,231 26.7

Net Trading Income 33,283 18,184 83.0 16,305 16,978 (4.0)

Other Operating Income 6,510 5,943 9.5 1,501 5,009 (70.0)

Operating Income 225,797 199,808 13.0 120,553 105,244 14.5

Net Impairment Loss (34,656) (18,929) (83.1) (18,211) (16,445) (10.7)

Net Operating Income 191,141 180,879 5.7 102,342 88,799 15.3

Total Operating Expenses (89,628) (82,905) (8.1) (46,958) (42,670) (10.0)

Profit before Tax 101,513 97,974 3.6 55,384 46,129 20.1

Profit after Tax 73,477 66,268 10.9 41,733 31,744 31.5

Key facts

Net Interest Income grew by 12.8% from GHS 144.3mn to GHS 162.8mn, which was generated largely from increases in short term

investments

Non-Funded Income increased by 13.5% to GHS 63.0mn (GHS 55.5mn at HY2016) on the back of increased trading income

Net Impairment Loss increased by 83.1% to GHS 34.7mn from GHS 18.9mn at HY2016 as a result of some loans being downgraded

Operating Income increased by 13.0% to GHS 225.8mn (GHS 199.8mn at HY2016) while Profit after tax increased by 10.9% to

GHS 73.5mn (GHS 66.3mn at HY2016)



INCOME STATEMENT EVOLUTION 2014-2017

NET INTEREST INCOME

(GHS mn)

NON-FUNDED INCOME

(GHS mn)

NET IMPAIRMENT LOSS

(GHS mn)

6.8

11.1

18.9

34.7

HY2014 HY2015 HY2016 HY2017

26.5

34.0 31.3

23.2

26.9

39.5

18.2 33.3

6.9

6.6

5.9

6.5

H Y 2 0 1 4 H Y 2 0 1 5 H Y 2 0 1 6 H Y 2 0 1 7

Other Income Net Trading Income

Net Fees & Commissions

79.4

111.0

144.3

162.8

HY2014 HY2015 HY2016 HY2017



INCOME STATEMENT EVOLUTION 2014-2017

COST-TO-INCOME RATIO NPL RATIO NET INTEREST MARGIN

32.3%

35.5%

41.5%

39.7%

30.0%

33.0%

36.0%

39.0%

42.0%

HY2014 HY2015 HY2016 HY2017

7.2%

6.9%

6.1%

12.6%

5.0%

7.0%

9.0%

11.0%

13.0%

HY2014 HY2015 HY2016 HY2017

10.…

10.8%

11.…

12.3%

9.5%

10.5%

11.5%

12.5%

13.5%

HY2014 HY2015 HY2016 HY2017



HY2017 - UNAUDITED BALANCE SHEET

Key Facts

KEY ITEMS (GHS ‘000) HY2017 HY2016 ΔY/Y (%)

Loans and Advances to Customers 1,905,437 2,048,990 (7.0)

Investment in Government Securities 1,130,964 213,555 429.6

Fixed Assets 271,360 177,571 52.8

Other Assets 791,202 842,281 (6.1)

Total Assets 4,098,963 3,282,397 24.9

Customer Deposits 2,423,222 1,508,337 60.7

Borrowings 863,704 1,042,452 (17.1)

Other Liabilities 120,661 129,386 (6.7)

Shareholders' Equity 589,195 532,709 10.6

Total Liabilities and Shareholders’ Equity 4,098,963 3,282,397 24.9

Total Assets increased by 24.9% to GHS 4.1bn (GHS 3.3bn at HY2016) which was largely as a result of increased

Investment in Government Securities

Fixed Assets growth of 24.9% as a result of on going Head Office project due for completion in December 2017.

Loans & Advances decreased by 7.0% to GHS 1.9bn (GHS 2.0bn at HY2016) as a result of selective lending policy and

tighter credit risk management in view of 2016 impairment charges.

Borrowings decreased by 17.1% to GHS 863.7mn (GHS 1.0bn at HY2016) as a facilities were retired during the period

Balance

Sheet

2



ASSET PROFILE 2014-2017

TOTAL ADVANCES TO CUSTOMERS HAVE DECLINED DUE TO SELECTIVE LENDING APPROACH

SECTORAL DISTRIBUTION OF LOANS

HY 2016

54.7% 51.1%62.4%

46.5%

33.6%24.8%

18.2%

27.6%

11.8%24.1% 19.4% 25.9%

0%

20%

40%

60%

80%

100%

HY2014 HY2015 HY2016 HY2017

Loans & Advances Other Interest Earning Assets Other Assets

Agriculture, Forestry & Finishing

<1%

Mining & Quarrying2%

Manufacturing8%

Construction25%

Electricity, Gas & Water21%

Commerce & Finance

19%

Transport, Storage & Communication

2% Services8%

Miscellaneous6%

Government9%

HY 2017

Agriculture, Forestry & Finishing

<1%

Transport, Storage & Communication

2%

Mining & Quarrying

2%

Manufacturing5%

Miscellaneous5%Government

11%Services

9%

Commerce & Finance

22%

Electricity, Gas & Water25%

Construction19%



CAPITAL & RETURNS 2014-2017

ROAE (ANNUALIZED) CAPITAL ADEQUACY RATIO

16.2%

20.1%20.7%

20.3%

5.0%

7.5%

10.0%

12.5%

15.0%

17.5%

20.0%

22.5%

HY2014 HY2015 HY2016 HY2017

ROAA (ANNUALIZED)

7.3%

6.1%

4.2%4.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

HY2014 HY2015 HY2016 HY2017

44.7%

41.7%

27.4% 26.2%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

HY2014 HY2015 HY2016 HY2017



Section 06

SHARE PRICE

EVOLUTION


SHARE PRICE EVOLUTION JUN. 16 – JUN. 17

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17

Sh

are

Pri

ce

(G

HS

)

Vo

lum

e T

rad

ed

Mill

ion

s

Volume Last Price

• A sale of 151,838,096 shares was made on February 9, 2017

• This chart excludes the sale of 27.7% of CAL shares by ADPI to Arise BV (Netherlands)


PRICING EVOLUTION 2014-2017

PRICE-TO-EARNINGS RATIO PRICE-TO-BOOK RATIO

3.79x

3.84x

3.31x3.28x

H Y 2 0 1 4 H Y 2 0 1 5 H Y 2 0 1 6 H Y 2 0 1 7

1.46x

1.39x

0.81x 0.82x

H Y 2 0 1 4 H Y 2 0 1 5 H Y 2 0 1 6 H Y 2 0 1 7


Section 07

STRATEGY & OUTLOOK


DELIVERING 2016 -2018 STRATEGY

• 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

Corporate

Banking

Technology

• 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

• 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

People

• 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

Retail Banking

• Deploy Agency Banking in 2017 through distribution outlets and financial service agents

• 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


Thank You

Q&A

half year 2017 results management presentation · 2020. 3. 8. · cal bank limited is an indigenous...

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