CAL Bank raises GH¢75 million in private placement
Accra, April 30, GNA - CAL Bank Limited, on Monday said it has reached definitive investment agreements, to raise GH¢75 million through a private placement.
The new investments will raise CAL's stated capital to GH¢ 100 million as mandated by the Bank's shareholders at its 2011 Annual General Meeting.
A statement to the Ghana Stock Exchange, copied to Ghana News Agency, said the amount exceeds Bank of Ghana's GH¢60 million minimum capital requirements for all locally-owned banks, that has been achieved well ahead of the 31st December 2012 deadline.
The agreements are subject to customary completion conditions.
Investors in the private placement, which was oversubscribed, include African Development Partners I, (“ADP I”), an Africa-focused private equity fund advised by Development Partners International ("DPI"), Proparco of France and the Social Security and National Insurance Trust ("SSNIT") of Ghana.
Under the deal, SSNIT will retain its 33.18 per cent in CAL Bank whilst ADP I and Proparco will acquire 28.97 per cent and 6.86 per cent holdings, respectively.
Speaking from the Bank's head office, the Chief Executive Officer (CEO) of CAL Bank, Mr. Frank Adu Jnr., said “the conclusion of this private placement spells the beginning of an exciting new era for the Bank. This successful transaction comes on the heels of our sterling First Quarter 2012 results.”
The Group achieved a 62.1 per cent increase in operating income and a 161.2 per cent increase in year-on-year profit after tax.
Key earnings drivers were a 78.5 per cent growth in non-interest revenue, driven particularly by trading income from increased international trade volumes.
The non-performing loans ratio decreased from 12.1 per cent to 8.4 per cent year-on-year.
"As we forecasted at the end of 2011, the resultant reduction in impairment charges has been achieved through targeted growth of a higher quality corporate loan book. Our new increased capital will enable us leverage our balance sheet to increase borrowings to sustain this loan growth in the coming year," Mr Adu said.
On liabilities, the 84.7 per cent increase in customer deposits was achieved by continued offerings of relevant products to deepen client relationships and increase our share-of-wallet.
Mr Adu said: “With the new capital, we are fully geared to deliver on our defined growth strategy. This is focused on growing CAL into a strong top-tier Ghanaian bank serving the needs of the fast expanding domestic corporate sector.”
He said the corporate banking and corporate finance units will be strengthened to tap into the burgeoning growth in the oil and gas related sectors, energy, mining and telecommunications.
Mr Adu said the bank was gearing up to develop a sound retail portfolio based on asset backed lending, including mortgages, enhancing our delivery channels through growth in our branch network, and electronic delivery channels over the next 3 years, to increase footprint and coverage and improve on brand visibility.
He said treasury activities would be strengthened to take advantage of the trade finance business that would continue to emanate from growth in Ghana's trade activity, and also developing relevant treasury products for its clientele.
Mr Adu said these would be underpinned by significant investment in the current Information technology infrastructure to augment business process automation and ultimately improve service efficiency & quality.
He said: “We will grow CAL Bank into the future with heightened relevance to the growing needs of our increasingly sophisticated clientele.”