Profit posted by CAL Bank for Q1 2021, was Ghs 52 million from the Ghs 47.8 million recorded for Q1 2020.
Growth in the bank’s profit was mainly driven by increments in its net interest income and operating profit. This saw total assets posted by the bank for Q1 2021 to be Ghs 7.88 billion, an increase of some Ghs 800 million from last year’s Ghs 7.08 billion.
The asset value growth was supported by the bank’s cash and cash equivalents which nearly tripled and non-pledged trading assets which increased by more than eight times.
Cash and cash equivalent amounted to Ghs 1.3 billion at the end of the first quarter of 2021, from the value of Ghs 512 million recorded at the end of the first quarter of 2020.
Meanwhile the loan asset quality of CAL Bank for period between Q1 2020 and Q1 2021, deteriorated by 4.7 percentage points.
CAL Bank at the end of the first quarter of 2021, posted a non-performing loan ratio of 14.4 percent of gross loans made to customers.
NPL for the same period last year was 9.7 percent of gross loans. Prior to the 4.7 percent decline in NPL from Q1 2020 to Q1 2021, CAL Bank in the previous year – 2019 to 2020 – also recorded a 3.6 percentage points increase in its NPL.
The increment in the NPL indicates a continuing deterioration of the bank’s loan asset due to rising number of bad loans made by the bank.
CAL Bank also witnessed its Capital Adequacy Ratio (CAR) decline by 3.9 percentage points on a year-on-year basis.
CAR for Q1 2021 according to the bank’s unaudited end-March 2021 financial statement, was 19.2 percent, a fall from 23.1 percent in Q1 2020.
The fall was also preceded by a 0.6 percentage points in its CAR from end-December 2019 to end-December 2020.
Despite the fall in CAR, the bank’s adequacy ratio is still above the regulatory 13 percent CAR requirement by the Bank of Ghana (BoG).
A bank’s CAR indicates if the bank has enough capital to absorb potential losses incurred due to bad loans.
It also used to measure the solvency level of a bank.
Non-pledged trading assets also increased from Ghs 113 million to Ghs 985 million in Q1 2020 and Q1 2021 respectively.
Then, is the bank’s total liabilities which increased by some Ghs 650 million from Q1 2020 to Q1 2021. Total liabilities at end Q1 2021, was Ghs 6.7 billion.
