CalBank reduces NPL to 11.2% in 2021
CalBank in its Audited Financial Statement for the year ended December 31, 2021, recorded a decline in its non-performing loans [NPL].
The Bank posted NPL of 11.2% at end-2021 compared to the 13.5% recorded at end-2020.
The decline in the bank’s bad loans is indicative that during the review period, some customers had recovered from the shocks of the pandemic and were able to adequately pay off their loans. It is also a reflection of the effective loan recovery methods being used the bank.
According to the statement, the bank’s assets value recorded an increase of GHC 2.1 billion, registering a total assets value of GHC 10 billion compared to the previous year’s GHC7.9 billion.
The increase was mainly due to the bank’s investment securities which grew to GHC 4.9 billion in 2021 from GHC 2.4 billion in 2020, indicating a year-on-year growth of about GHC 2 billion.
Loans and advances to customers, however, decreased from GHC 2.4 billion in 2020 to GHC 2.2 billion in 2021, showing that CalBank marginally reduced loans to customers in the review year.
Cash and cash equivalent which determines the amount of physical cash the bank has, also witnessed a decline from GHC 1.4 billion in 2020 to GHC 1.3 billion in 2021.
The bank’s total liabilities, on the other hand, also witnessed an increase from GHC 6.7 billion in 2020 to GHC 8.7 billion in 2021.
The bank’s liabilities which is made up of borrowings, deposit from banks and other financial institutions as well as deposit from customers all recorded increments in the review year.
CalBank’s total liabilities was fueled by deposits from customers which recorded an increase of GHC 1 billion, ending 2021 with total customer deposits of GHC 5.1 billion as compared to the GHC 4.1 billion in 2020.
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Deposits from banks and other financial institution increased from GHC 263 million to GHC1.1 billion in 2021.
Additionally, the statement notes that the bank registered a net profit of GHC 215 miilion in 2021 as against the net profit of GHC 206 million recorded in 2020.
Meanwhile, the bank’s Capital Adequacy Ratio [CAR] saw an increase from 21.9% in 2020 to 24.5% in the review period which is way above the industry’s current CAR of 11.5%.
With a CAR of 24.5%, it means that CalBank has enough capital to absorb potential losses incurred due to bad loans.
It also means that the bank is highly unlikely to become insolvent and very capable of protecting depositors’ monies.
The Capital Adequacy Ratio (CAR) is a measurement of a bank’s available capital expressed as a percentage of a bank’s risk-weighted assets and liabilities.
Capital Adequacy Ratios mandate that a certain amount of the deposits be kept aside whenever a loan is being made. These deposits are kept aside as provisions to cover up the losses in case the loan goes bad.
Peruse statement below:
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