The Managing Director of CalBank, Philip Owiredu, is hopeful that the bank’s price on the stock market will experience some stability and even see some appreciation in the coming months.
Despite registering strong profits across board for the first three quarters of 2020, listed banks on the Ghana Stock Exchange, including CalBank, continue to see a drop in their valuation.
But Mr. Owiredu hopes that Calbank’s position on the local bourse will not drop further.
“If you look at the capital market as a whole and the aggregate financial index that has dipped, CalBank’s dip is just about the average dip we’ve had. There has been stability within the last three to four weeks. We hope that we’ll be able to maintain that stability, and we hope that as the economy comes back into some sense of growth, that would impact on the stock market.”
“But then we should also understand that there are a lot of foreign investors in this market and considering the challenges that we are having with COVID and the political period that we have, there’s going to be a lot of pressure on the stock market in terms of people trying to move out funds especially from the capital market to the intrabuying government bonds and papers. So we hope that we would have stability. We hope to see some price appreciation by the end of the year as we’ve put our third quarter numbers up.”
Profitability
Mr. Owiredu further explained that the bank is ready to broaden its revenue generation base in the coming years.
CalBank’s profits only increased by 2.3 percent from January to September 2020 as compared to the same period last year.
According to the bank, the adverse impact of the COVID-19 pandemic on businesses and consumers counted for additional impairment charges, consequently reducing underlying profitability.
Still speaking to Citi Business News, he outlined the various means through which the bank is planning to boost its revenue in the years ahead.
“What we’re doing is to ensure that we broaden our revenue generation base. CalBank is quite strong when it comes to the corporate sector and the treasury function, so we would have to enhance our presence within the retail sector,” Mr. Owiredu stated.
“Through the pandemic, one benefit that we’ve had is also with the use of our platforms. We developed our CalApp and it went live last year but has really seen traction this year. Quite a number of transactions have moved from in-branch to our platforms and by so doing, we know that that leads the foundation for us to see growth next year.”
Financial sector stocks performance on the Ghana Stock Exchange have generally been poor for the first three quarters of 2020 as compared to their performance in the same period in 2019.
This has generally been attributed to a combination of poor public sentiments, the fallouts from the banking sector reforms as well as the impact of COVID-19.
The Ghana Stock Exchange Composite Index, which is primarily driven by financial and consumer stocks, has experienced losses for the past three years, with the current year-to-date loss for the entire index being about 18.6 percent, while the year-to-date loss for listed financial sector stocks is about 18.2 percent.
CalBank, which has also experienced a dip on the market, has its current share price at 70 pesewas. The indigenous bank began the year with a share price of 89 pesewas but has since lost 21.35 percent off that price valuation, ranking it 31st on the GSE in terms of year-to-date performance.
