CAL BANK LIMITED
FIRST QUARTER 2015
“FACTS BEHIND THE FIGURES”
Investor & Analyst Presentation
Disclaimer
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.
Speakers
Mr. Frank Adu
Mr. Philip Owiredu
Mr. Joseph Ofori-Teiko
Managing Director
Executive Director
General Manager
Mr. Charles Amoah
Ms. Dzifa Amegashie
Assistant General Manager
Investor Relations
Outline
> Operating Environment
> Banking Sector Overview
> Company Overview
> FY 2014 Financial Highlights
> Q1 2015 Performance
> Share Price Performance
> 2015 Strategy and Outlook
OPERATING ENVIRONMENT: GHANA
5
Ghana Macro Overview - Q1 2015
Rising Inflation (%)
Depreciating Cedi
To be updated
till March 2015
March 2015:
16.6%
Strained Fiscal Position (%)
T-Bill Rates
March 2014
March 2015
91-day
23.7%
25.1%
182-day
21.2%
25.8%
1-year
22.5%
22.5%
2-year
23.0%
23.0%
5-year
-
21.0%
BANKING SECTOR OVERVIEW
7
Ghana Banking Sector Indices - Q1 2015
The banking sector currently has 28 banks: 14 foreign, 3 government and 11 local banks
KEY METRICS
POLICY RATE¹
MARCH 2014
DEPOSITS
MARCH 2015
ΔY/Y
MARCH 2014
18.0
21.0
16.7
26.0
34.0
30.8
PERCENT
PERCENT
PERCENT
GHS Billion
GHS Billion
GHS Billion
TOTAL INDUSTRY ASSETS
MARCH 2014
MARCH 2015
ΔY/Y
LOANS AND ADVANCES²
ΔY/Y
DEC 2014
DEC 2014
ΔY/Y
40.0
55.1
37.8
17.0
24.1
41.5
GHS Billion
GHS Billion
GHS Billion
GHS Billion
GHS Billion
GHS Billion
INDUSTRY NPL RATIO
1.
2.
MARCH 2015
INDUSTRY CAR
MARCH 2014
MARCH 2015
ΔY/Y
MARCH 2014
MARCH 2015
ΔY/Y
12.4
12.1
-2.4
17.9
18.5
3.4
PERCENT
PERCENT
PERCENT
PERCENT
PERCENT
PERCENT
The MPC increased the policy rate to 22% at its last committee meeting ending Wednesday, May 13, 2015
FY 2014 Numbers
CAL BANK “AT A GLANCE”
9
CAL Bank “At a Glance” - Q1 2015
Shareholding Structure
CAL Bank
Limited
is an indigenous
bank established
in Ghana in 1990,
listed on the
Ghana Stock
Exchange
SUBSIDIARIES
EMPLOYEES
3 752
WHOLLY
OWNED
PROFESSIONAL
STAFF
Channels
22 85 15
Branches
ATMs
Corr. Banks
Market Information¹
ISSUED SHARES
MARKET VALUE
PUBLIC FLOAT
548.26
553.74
36.74
MILLION
MILLION CEDIS
PERCENT
1. As at 31/03/2015
Partners
CAL BANK Q1-2015 PERFORMANCE
11
CAL - Amongst Top 10 Banks in 2014 Market share
FY 2014 Share of Industry PAT
15.13%
13.20%
10.18%
8.69%
7.27%
EBG
GCB
SCB
BBG
6.86%
SBG
CAL
6.71%
ZBL
5.54%
UBA
4.16%
ABL
14.00%
14.0%
12.00%
12.0%
10.00%
10.0%
8.00%
8.0%
6.00%
5.52%
4.00%
4.0%
2.00%
2.0%
0.00%
0.0%
EBG
Source: Company Financials
GCB
SBG
SCB
ZBL
FBL
BBG
CAL
NIB
ADB
FBL
3.88%
NIB
FY 2014 Share of Industry loans
FY 2014 Share of Industry Total Assets
6.0%
4.04%
UBL
UBA
6.25%
2.65%
HFC
CAL ranks Top 10 in Banks in 2014 KPIs
FY 2014 RoE
FY 2014 RoA
8.0%
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
7.0%
35.8%
6.0%
5.18%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
BOB
GCB
BBG
SCB
EBG
UBA
CAL
ABL
ZBL
HFC
SBG
FY 2014 Cost-to-income ratio
57.80%
41.85%
42.14%
42.38%
SCB
ZBL
BBG
44.49%
46.64%
47.07%
EBG
SBG
49.87%
52.82%
34.70%
28.01%
13.66%
BOB
UBA
CAL
ABL
NIB
GCB
HFC
NIB
Q1-2015- Income Statement
1
Profitability
Key Items (GHS ‘000)
Q1 2015
Q1-2014
Change
FY 2014
FY 2013
Change
Net Interest Income
56,171
40,107
40.1%
184.084
143,743
28.1%
Net Fees & Commissions
17,084
8,487
101.3%
51,902
29,766
74.4%
Net Trading Income
17,275
15,666
10.3%
76,337
31,153
145.0%
Other Income
4,075
3,555
14.6%
12,619
14,492
-12.9%
Total Income
94,606
67,814
39.5%
324,942
219,153
48.3%
Credit Loss Expenses
(5,228)
(5,141)
1.7%
(20,478)
(17,516)
16.9%
Total Operating Expenses
(31,493)
(21,096)
49.3%
(106,067)
(74,072)
-43.2%
Profit before tax
57,941
41,577
39.4%
198,533
127,602
55.6%
Profit after tax
40,519
29,201
38.8%
143,151
93,540
53.0%
 Net Interest Income growth of 40.1% y/y attributable to a 70.1% growth in interest-bearing assets
 Net Fees & commissions up by 101.3% from increased loan and L/C volumes.
Key facts
 Credit Loss Expense growth of just 1.7% from more stringent loan monitoring methods resulting in lower defaults
 Staff costs up by 58.0% , forming 65.0% of Total Operating Expenses in Q1-2015, in line with previous year Q1-2014
(62.0%)
 Operating Expenses up 49.3% . Higher inflation , currency depreciation & increased fuel usage during power cuts
contributed to higher operating costs
 39.4% y/y growth in Profit before tax
Income Statement Evolution 2013-2015
Net Interest Income GHS 000’s
56,171
60,000
Non- Funded Income GHS 000’s
7,000
45,000
40,435
40,000
50,000
6,000
35,000
40,107
40,000
Credit Loss Expense GHS 000’s
5,000
27,707
30,000
32,363
25,000
30,000
20,000
20,000
5,228
Q1 2014
Q1 2015
4,359
4,000
17,195
3,000
15,000
10,000
10,000
5,141
2,000
5,000
0
Q1 2013
Q1 2014
1,000
0
Q1 2015
Q1 2013
Cost-to-income ratio %
9
33.9
30
Q1 2013
Q1 2015
NPL ratio %
40
35
Q1 2014
33.3
31.1
16.0%
8.1
8
7.0
7
6
25
Net-Interest Margin %
6.1
8.0%
6.0%
3
10
2
4.0%
5
1
2.0%
0
0
Q1 2013
Q1 2014
Q1 2015
10.8%
10.0%
4
15
12.2%
12.0%
5
20
14.1%
14.0%
0.0%
Q1 2013
Q1 2014
Q1 2015
Q1 2013
Q1 2014
Q1 2015
Asset Profile 2013-2015
Interest earning assets dominate
120%
100%
1%
1%
23%
80%
2%
33%
43%
60%
40%
76%
66%
55%
20%
0%
Q1 2013
Q1 2014
Loans and Advances
Q1 2015
Other Interest Earning Assets
Other Assets
Sectoral Distribution of Loans
Q1 2015
Q1 2014
Commerce&
Finance
24%
Transport &
Communication
3%
Electricity ,
Water &Gas
9%
Misc
5%
Services
13%
Government
17%
Commerce and
Finance, 18%
Transport&
communication,
2%
Electricity,
Water& Gas,
22%
Mining
4%
Services, 12%
Government,
10%
Construction,
23%
Construction
25%
Misc, 6%
Manufacturing ,
4%
Mining , 3%
Capital & Returns 2013-2015
Capital Adequacy Ratio - Ample Capital
ROAA & ROAE
25.00%
ROAA
ROAE
22.01%
53.70%
20.00%
18.70%
17.20%
42.90%
42.90%
15.00%
10.00%
5.00%
8.00%
7.60%
6.70%
Q1 2013
Q1 2014
Q1 2015
0.00%
Q1 2013
Q1 2014
Q1 2015
Q1-2015 - Balance sheet
Key Items (GHS ‘000)
Loans and Advances
Investments in Government Securities
2
Balance Sheet
Q1 2015
Q1-2014
1,466,761
1,029,595
895,014
Q4-2014
Q1.15/Q4.14
Change
42.5%
1,337,205
9.7%
127.7%
409,217
118.7%
Y/Y Change
392,997
Other Assets
661,084
271,074
143.9%
890,014
(25.9)%
Fixed Assets
84,625
51,257
65.1%
78,918
10.4%
Total Assets
3,107,484
1,744,923
78.1%
2,715,353
14.4%
Total Deposits
1,406,581
905,473
55.3%
1,395,841
0.8%
Borrowings
1,174,867
456,310
157.5%
827,455
42.0%
85,822
67,613
26.5%
140,216
(7.6)%
Shareholders' Funds
440,514
315,527
39.6%
399,531
10.3%
Liabilities and Shareholders’ Funds
3,107,484
1,744,923
78.1%
2,715,353
14.4%
Other Liabilities
 Total Assets grew by 78.1% y/y largely supported by a 42.5% growth in Loans & Advances (mainly to the corporate
sector) and investment in Government securities.
 Fixed Assets growth of 65.1 % mainly from revaluation of landed properties
Key Facts
 Total deposits increased by 55.3 % y/y primarily from increased wholesale deposits and increase in branch network
from 20 to 22.
 Borrowings increased by 157.5% y/y through securing additional facilities to support asset growth and to support
increased volume of trade and financing activities.
CAL Share Price - Year to March 2015
Share Price (GHS)
1.40
1.20
1.00
0.80
0.60
CAL stock appreciation (YTD):
EPS:
P/E :
P/B :
Dividend Yield :
Market cap :
0.40
8.2%
GHS 0.2611(annualized)
3.6x
1.4x
7.64%
GHS 553.74 Million (US 208 Million)
0.20
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Pricing Evolution 2013-2015
PRICE-TO-EARNINGS RATIO
PRICE-TO-BOOK RATIO
1.7x
4.50x
1.4x
3.60x
Q1 2013
Q1 2014
3.60x
1.3x
Q1 2015
Q1 2013
Q1 2014
Q1 2015
2015 Strategy & Outlook
Retail Banking
•
Increase branch network to 30 - selected locations to increase deposit base
•
Launch branchless banking through agencies and outlets
•
Concerted drive into new E-business initiatives to boost deposits and increase payment channels e.g.;
- E- ZWICH card enrolment project
- POS Merchant Acquisition on Visa/MasterCard
- E-card School fees collection
Corporate
Banking
People
•
Pursue high quality, selective asset growth from target sectors
•
Grow non-funded income from International trade , forex , advisory & syndication mandates
•
Increase share of wallet across target business sectors (oil & gas, energy & power, services and telecommunications)
•
Roll-out bespoke training of all staff using dedicated CAL resource Center
•
Continue to reward staff performance to retain motivated & high quality personnel
•
Deepen cross-training to enhance cost and operational efficiency
•
Remain on-track with CAL Head Office project to provide world class , conducive work environment
•
Continue business process automation to boost operating efficiency
•
Increase operational ATMs from 85 to 110 by year end 2015
•
Enhance IT products to offer additional channel expansion notably:
Technology
Risk Management
& Compliance
–
VISA/MasterCard POS merchant terminals
–
MasterCard/ China Union Pay products
–
ATM acquiring on MasterCard
–
Issuance of Prepaid Master Cards
–
Enhance Visa Platform using VBV
–
Acquiring Diners and Discovery on ATMs/POS channels
–
Enhanced Internet banking
•
Strengthen risk management framework
•
Balance market risk exposures while optimising return on risk
•
Enhance loan monitoring and early-detection toolkits to ensure quality loan portfolio.
•
Maintain low NPL ratio
THANK YOU
Q&A