CAL BANK LIMITED HALF YEAR 2016 INTERIM RESULTS PRES ESENTATI - - PowerPoint PPT Presentation

CAL BANK LIMITED

HALF YEAR 2016 INTERIM RESULTS

PRES ESENTATI ENTATION ON

August 17, 2016

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

D I S C L A I M E R 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.

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

TA B L E O F C O N T E N T S

INTRODUCTION & HIGHLIGHTS

Dzifa Amegashie, Head of Investor Relations

1H16 FINANCIAL PERFORMANCE

Philip Owiredu, Executive Director

QUESTION & ANSWER

Moderated by IC Securities (Ghana) Limited

CLOSING REMARKS

Dzifa Amegashie, Head of Investor Relations

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

S P E A K E R S

• Mr. Philip Owiredu

Executive Director

• Mr. Joseph Ofori-Teiko

General Manager

• Mr. Charles Amoah

Assistant General Manager

• Ms. Dzifa Amegashie

Investor Relations

INTRODUCTION & HIGHLIGHTS

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

I N T R O D U C T I O N & H I G H L I G H T S

Operating Environment CAL Bank Limited Overview

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

O P E R AT I N G E N V I R O N M E N T : G H A N A M A C R O “ S N A P S H O T ” I N F L AT I O N

18.4

P E R C E N T

26.0

P E R C E N T

P O L I C Y R AT E

3.3

P E R C E N T

C U R R E N C Y

Currently 16.7% (July 2016) down from 17.1% in June 2015 & down from its peak of 19.2% in March 2016. Maintained at 26.0% since November

• 2015. Up from 22.0% in June 2015

The Ghana Cedi depreciated by 3.3% against the USD in 1H16 compared to 26.1% in 1H15

G D P G R O W T H R AT E

4.9

P E R C E N T

Real GDP grew by 4.9% (y-o-y)¹ in 1Q16 compared to 4.5% recorded for 1Q15.

P U B L I C D E B T I N T E R B A N K R AT E

Source: MPC Release – July 2016, Ghana Statistical Service, BoG

• 1. Year-on year estimates compare current economic developments with that of the same period in the previous year. There is little or no influence of seasonal variations

66.6

P E R C E N T

Total public debt as a percent of GDP in May 2016, marginally down from 67.9% in June 2015

25.5

P E R C E N T

Interbank lending rate in June 2016, up from 24.1% in June 2015

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

O P E R AT I N G E N V I R O N M E N T : B A N K I N G S E C T O R

BANKING SECTOR UPDATES

T O T A L A S S E T S

66.1

B I L L I O N

42.7

B I L L I O N

T O T A L D E P O S I T S T O T A L A D V A N C E S

Annual growth of 17.7% Annual growth of 19.3% Annual growth of 11.3%

BANKING SECTOR OVERVIEW¹

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

16.6

P E R C E N T

Down from 17.9% in January 2016

I N D U S T R Y N O N - P E R F O R M I N G L O A N S Up from 14.6% in January 2016 I N D U S T R Y A V E R A G E L E N D I N G R A T E Up from 29.0% in June 2015 » In 1H16, the banking sector had 30 operating

banks up from 29 in 1Q16. Sovereign Bank, an indigenous bank, began operations in 2Q16:

ᗌ 14 foreign ᗌ 3 government ᗌ 13 local banks » Ghana Home Loans, a leading mortgage financing

company in Ghana, was issued with a provisional banking license by the Bank of Ghana (BoG) in July 2016. The license paves way for Ghana Home Loans to begin operations as a universal bank and also grow the company.

» Treasury Bills Market:

Source: MPC Release – July 2016, Ghana Statistical Service, BoG

June 16 (%) June 15 (%) % ∆ 91-day rate 22.8 25.2 9.5% 182-day rate 24.6 25.9 5.0% 1-year rate 23.0 22.5 2.2%

1. All figures as at May 2016 unless otherwise indicated 2. June 2016

31.4

B I L L I O N

19.3

P E R C E N T

32.7

P E R C E N T

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

I N T R O D U C T I O N & H I G H L I G H T S

Operating Environment CAL Bank Limited Overview

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

C A L B A N K L I M I T E D

15

Active Corr. Banks

ISSUED SHARES

548.26

MILLION

MARKET VALUE

438.60

MILLION CEDIS¹

PUBLIC FLOAT

36.74

PERCENT

26

Branches

93

ATMs

CHANNELS

SHAREHOLDING STRUCTURE

EMPLOYEES

780

PROFESSIONAL STAFF

CAL Bank Limited

is an indigenous bank established in Ghana in 1990, listed on the Ghana Stock Exchange

SUBSIDIARIES

3

WHOLLY OWNED

PARTNERS

SSNIT 33.2% ADP I HOLDING 4 27.7% OTHERS 25.8% ICAM 3.9% FRONTAURA 3.0% DANIEL OFORI 2.5% FRANK BRAKO ADU, JR 2.2% CENTUM EXOTICS 2.7%

1. Share Price at 30 June 2016 – GHS 0.80

1H16 FINANCIAL PERFORMANCE

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

1 H 1 6 F I N A N C I A L P E R F O R M A N C E

1H16 Performance of Listed Banks CAL 1H16 Performance Highlights CAL Share Price Performance for the period CAL Strategy and Outlook

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

1 H 1 6 G R O U P P E R F O R M A N C E O F L I S T E D B A N K S : P R O F I T - A F T E R - TA X

196 151 73 79 13 16 N/A 211 188 150 66 26 17 EGH GCB SCB CAL SOGEGH HFC UTB

1H15 1H16 G H S M I L L I O N S

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

1 H 1 6 G R O U P P E R F O R M A N C E O F L I S T E D B A N K S : T O TA L A S S E T S

6.8 4.9 3.4 3.1 1.9 1.4 2.1 6.7 5.0 3.7 3.3 2.2 1.7 EGH GCB SCB CAL SOGEGH HFC UTB

1H15 1H16 N/A TOTAL ASSETS (GHS BILLIONS)

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

1 H 1 6 G R O U P P E R F O R M A N C E O F L I S T E D B A N K S - N P L s

NON PERFORMING LOANS RATIO (%)

26.3 16.4 15.4 1.5 9.0 6.9 51.7 20.7 20.2 17.5 13.1 6.1 SCB HFC SOGEGH EGH GCB CAL UTB

1H15 1H16

N/A

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

1 H 1 6 G R O U P P E R F O R M A N C E O F L I S T E D B A N K S : S H A R E H O L D E R R E T U R N S - R O A

4.3% 6.2% 5.7% 5.1% 1.4% 2.2% 8.0% 7.5% 6.3% 4.0% 2.3% 2.0% SCB GCB EGH CAL SOGEGH HFC UTB

ROA 15 ROA 16 N/A

R O A ( % )

Using annualized 2016 figures

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

1 H 1 6 G R O U P P E R F O R M A N C E O F L I S T E D B A N K S : S H A R E H O L D E R R E T U R N S - R O E

26.3% 51.4% 39.9% 36.2% 11.4% 12.7% 53.4% 49.4% 39.4% 24.9% 20.0% 16.1% SCB EGH GCB CAL SOGEGH HFC UTB

ROE 15 ROE 16 N/A

R O E ( % )

Using annualized 2016 figures

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

1 H 1 6 P E R F O R M A N C E O F L I S T E D B A N K S : S T O C K R E T U R N S

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

3.9x 3.1x 1.7x 1.5x 1.4x 1.2x 2.9x 2.3x 1.3x 0.9x 0.9x 1.1x SCB EGH HFC GCB CAL SOGEGH

1H15 1H16

12.7x 5.9x 6.6x 3.5x 4.0x 7.8x 11.5x 5.6x 5.0x 2.9x 3.5x 0.0x SCB EGH SOGEGH GCB CAL HFC

1H15 1H16

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

1 H 1 6 F I N A N C I A L P E R F O R M A N C E

1H16 Performance of Listed Banks CAL 1H16 Performance Highlights CAL Share Price Performance for the period CAL Strategy and Outlook

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

C A L S U M M A R I Z E D G R O U P I N C O M E S TAT E M E N T 1 H 1 6

KEY ITEMS (GHS ‘000) 1H2016 1H2015 ΔY/Y

Interest Income 281,589 217,879 29.2% Interest Expense (137,254) (106,856) (28.4)% Net Interest Income 144,335 111,023 30.0% Fees and Commission Income 33,105 36,714 (9.8)% Fees and Commission Expense (1,759) (2,677) 34.3% Net Fees & Commissions 31,346 34,037 (7.9)% Net Trading Income 18,184 39,548 (54.0)% Other Income 5,943 6,591 (9.8)% Total Income 199,808 191,199 4.5% Credit Loss Expense (18,929) (11,136) (70.0)% Net Operating Income 180,879 180,063 0.5% Total Operating Expense (82,905) (67,894) (22.1)% Profit Before Tax 97,974 112,225 (12.7)% Income Tax Expense (26,841) (28,087) 4.4% National Fiscal Stabilization Levy (4,865) (5,529) 12.0% Profit-After-Tax 66,268 78,609 (15.7)%

K E Y F A C T S

• Trading income and fees and commissions fell considerably due to general slow down in trading activities
• Credit loss expense increased due to additional write-downs of specific corporate loans in the construction

sector

• Growth in operating expenses in line with inflation and increase in cost of goods and services

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

I N C O M E A N A LY S I S 2 0 1 2 - 1 6 N O N - I N T E R E S T R E V E N U E 2 0 1 2 - 1 6

NET INTEREST INCOME and NET INTEREST MARGIN ANALYSIS NON-FUNDED INCOME

31.2 69.3 79.4 111.0 144.3 9.5 14.3 10.7 10.6 11.6 2 4 6 8 10 12 14 16

• 20.0

40.0 60.0 80.0 100.0 120.0 140.0 160.0 1H12 1H13 1H14 1H15 1H16 GHS millions NII NIM 43% 48% 44% 42% 57% 47% 28% 45% 49% 33% 10% 25% 11% 8% 11% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1H12 1H13 1H14 1H15 1H16 Net Fees & Commissions Net Trading Income Other Income

55.5m 19.9m 30.9m 60.3m TOTAL 80.2m

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

C R E D I T L O S S E X P E N S E A N D N P L s

CREDIT LOSS EXPENSE

5.1 8.8 6.8 11.1 18.9

• 2.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 1H12 1H13 1H14 1H15 1H16 GHS Millions

NON PERFORMING LOANS

48.2 55.2 86.6 112.4 131.1 8.1% 6.0% 7.2% 6.9% 6.1% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%

• 20.0

40.0 60.0 80.0 100.0 120.0 140.0 1H12 1H13 1H14 1H15 1H16 GHS Millions NPLs NPL Ratio

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

P R O F I T D R I V E R S

COST-TO-INCOME-RATIO

40.6% 35.3% 32.3% 35.5% 41.5%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 1H12 1H13 1H14 1H15 1H16

COST OF FUNDS - CONSOLIDATED

7.3% 10.5% 9.9% 7.6% 10.5%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 1H12 1H13 1H14 1H15 1H16

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

C A P I TA L

RETURN ON AVERAGE ASSETS CAPITAL ADEQUACY RATIO

19.1% 17.8% 16.2% 20.1% 20.7% 0.0% 2.5% 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% 20.0% 22.5% 1H12 1H13 1H14 1H15 1H16 Regulatory Minimum: 10%

29.7% 41.9% 44.7% 41.7% 27.4% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 1H12 1H13 1H14 1H15 1H16 ROAE 4.8% 7.4% 7.3% 6.1% 4.2% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 1H12 1H13 1H14 1H15 1H16 ROAA

RETURN ON AVERAGE EQUITY

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

C A L S U M M A R I Z E D G R O U P B A L A N C E S H E E T 1 H 1 6

KEY ITEMS (GHS ‘000) 1H2016 1H2015 ΔY/Y Investments in Government Securities 213,555 546,842 (60.9)% Loans and Advance to Customers 2,048,990 1,581,682 29.5% Fixed Assets 177,571 92,600 91.8% Other Assets 842,281 875,230 (3.8)% Total Assets 3,282,397 3,096,354 6.0% Total Deposits 1,577,850 1,606,544 (1.8)% Borrowings 1,042,452 936,981 11.3% Other Liabilities 129,386 118,585 9.1% Shareholders Equity 532,709 434,244 22.7% Total Liabilities and Shareholders Equity 3,282,397 3,096,354 6.0%

K E Y F A C T S

• Decrease in investment in government securities as maturing investments were not rolled over to bolster

liquidity.

• Loans and advances growth of 29.5% mainly in commerce and finance, and energy sectors.
• Fixed asset growth of 91.8% over the period primarily from our investment in new IT infrastructure and

head office building project.

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

G R O W I N G A S S E T B A S E 2 0 1 2 - 1 6

TOTAL ASSETS TOTAL ASSET MIX

982.3 1,282.8 2,100.9 3,096.4 3,282.4

• 500.0

1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0 1H12 1H13 1H14 1H15 1H16 GHS Millions

Cash & Bank Balances 21% Loans & Advances 55% Property & Equipment 3% Investments 19% Other Assets 2%

1H15 1H16

Cash & Bank Balances 12% Loans & Advances 72% Property & Equipment 6% Investments 8% Other Assets 2%

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

D E P O S I T P O R T F O L I O 2 0 1 2 - 1 6

DEPOSIT MIX BY TYPE

37.9% 45.3% 49.5% 48.3% 44.6% 56.9% 48.5% 44.0% 46.5% 47.9% 5.2% 6.2% 6.5% 5.2% 7.5%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 1H12 1H13 1H14 1H15 1H16 Current Account Time Deposits Savings Deposits

65.9% 70.6% 69.3% 61.3% 77.5% 34.1% 29.4% 30.7% 38.7% 22.5%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 1H12 1H13 1H14 1H15 1H16 Local Currency Foreign Currency

DEPOSIT MIX BY CURRENCY

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

L O A N P O R T F O L I O

Agriculture <1% Transport, Storage & Communication 2% Mining & Quarrying 4% Manufacturing 4% Miscellaneous 6% Government 16% Services 11% Commerce & Finance 15% Electricity, Gas & Water 16% Construction 26%

LOAN DISTRIBUTION BY SECTOR

89.1% 88.4% 84.1% 82.9% 79.2% 10.9% 11.6% 15.9% 17.1% 20.8% 1H12 1H13 1H14 1H15 1H16 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Corporate Retail

LOAN DISTRIBUTION BY CUSTOMER TYPE

1H16 1H15

Agriculture <1% Transport, Storage & Communication 2% Mining & Quarrying 2% Manufacturing 5% Miscellaneous 5% Government 11% Services 9% Commerce & Finance 22% Electricity, Gas & Water 25% Construction 19%

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

F U N D I N G M I X

66.3% 62.9% 43.9% 53.2% 48.9% 19.2% 19.6% 16.0% 14.8% 17.3% 14.5% 17.5% 40.1% 32.0% 33.8%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 1H12 1H13 1H14 1H15 1H16 Deposits Equity Borrowing

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

1 H 1 6 F I N A N C I A L P E R F O R M A N C E

1H16 Performance of Listed Banks CAL 1H16 Performance Highlights CAL Share Price Performance for the period CAL Strategy and Outlook

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

S H A R E P R I C E C H A R T J A N - J U N 2 0 1 6

0.00 0.20 0.40 0.60 0.80 1.00 1.20

04-Jan-16 29-Jan-16 23-Feb-16 19-Mar-16 13-Apr-16 08-May-16 02-Jun-16 27-Jun-16

• 500.00

1,000.00 1,500.00 2,000.00 2,500.00

GHS Thousands

Value Traded (GHS) Volume Price (GHS)

Min Price: GHS 0.79 Max Price: GHS 1.05

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

P R I C I N G E V O L U T I O N

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

2.95x 6.00x 4.13x 3.96x 3.46x 1H12 1H13 1H14 1H15 1H16 0.93x 1.99x 1.49x 1.42x 0.85x 1H12 1H13 1H14 1H15 1H16

• 1. Trailing 12-months

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

1 H 1 6 F I N A N C I A L P E R F O R M A N C E

1H16 Performance of Listed Banks CAL 1H16 Performance Highlights CAL Share Price Performance for the period CAL Strategy and Outlook

H A L F Y E A R 2 0 1 6 I N T E R I M R E S U L T S | P R E S E N T A T I O N

2 0 1 6 - 2 0 1 8 S T R AT E G Y & O U T L O O K

People Technology Risk Management & Compliance

• 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.
• 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.
• 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.

• 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.

Retail Banking Corporate Banking

• 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.
• Refresh existing products and services by leveraging on enhanced technology to improve customer experience and

market competitiveness.

34

QUESTION & ANSWER PERIOD

CLOSING REMARKS