CAL bank’s total profits for 2016 dropped by as much as 95 percent compared to the profits recorded in 2015.
The bank’s profit dropped to 7.2 million cedis in 2016 from the over 160 million cedis recorded in the previous year.
At CAL Bank’s 2016 AGM, the Board explained that the significant drop in profits was as a result of provisions for an impairment charge of about 199.2 million cedis.
This was also attributed to the huge energy sector debts.
Though shareholders were generally dissatisfied with the subsequent non-payments of dividends, Managing Director of CAL Bank, Frank Adu Junior explained to Citi Business News the plan was necessary to ensure that the critical issues are addressed.
“I think while shareholders were not happy about the fact that they were not going to receive dividends, they are also smart; they understand that you are also cleaning up the mess and that it is better to be prudent and protect the balance sheet than to go and pay dividends when you are not in the position to do so,” he stated.
“You are in a business where the bank has been entrusted to you to grow it. All financial institutions which gallop fail; you do not sell money the way you sell other commodities; it’s risky so you take your time,” Mr. Adu added.
CAL Bank’s total operating income also decreased from 388.4 million cedis in 2015 to 357.4 million cedis in 2016.
Total expenses equally went up between 2015 and 2016; from 175.27 million cedis in 2015 to 345.36 million cedis in 2016, owing to the provisions for the impairment loss (199.2 million cedis).
Meanwhile, CAL Bank increased its total assets from 3.35 billion cedis to 3.59 billion cedis between 2015 and 2016.
By: Pius Amihere Eduku/citibusinessnews.com/Ghana