C A L B A N K L I M I T E D G H A N A S T O C K E X C H A N G E - M A Y

Transcription

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

2 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. 2

3 M a n a g e m e n t Te a m 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 3

4 O U T L I N E > Operating Environment > Banking Sector Overview > CAL Bank Overview > 1Q2017 Performance of Listed Banks > CAL Bank FY 2016 & 1Q2017 Performance > Share Price Evolution > Strategy & Outlook

5 O P E R A T I N G E N V I R O N M E N T : G H A N A

6 G H A N A M A C R O O V E R V I E W 1Q I N F L AT I O N D O W N C E D I S T A B I L I T Y 12.8% in March % in March 2016 Year-to-date 1 : April 2016 April 2017 USD/GHS: -0.3% +0.5% GBP/GHS: +0.6% -5.0% EUR/GHS: -4.8% -4.3% 23.5% in March % in January P O L I C Y R AT E D E C L I N E Policy rate has declined since November Outlook is for further decline following easing in inflationary pressures. Source: Bank of Ghana, Summary of Economic and Financial Data, March As at April 28, 2016 and April

7 Dec-15 Dec-15 Jan-16 Jan-16 Feb-16 Feb-16 Mar-16 Mar-16 Apr-16 Apr-16 May-16 May-16 May-16 Jun-16 Jun-16 Jul-16 Jul-16 Aug-16 Aug-16 Sep-16 Sep-16 Oct-16 Oct-16 Nov-16 Nov-16 Nov-16 Dec-16 Dec-16 Jan-17 Jan-17 Feb-17 Feb-17 Mar-17 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 G H A N A M A C R O O V E R V I E W 1Q GDP GROWTH RATE (%) DECLINING INFLATION (%) March 2017: 12.8% Sources: Bank of Ghana, Summary of Economic and Financial Data, March 2017 Ghana Statistical Service Bloomberg 7

8 G H A N A M A C R O O V E R V I E W 1Q CEDI STABILISING VS. MAJOR CURRENCIES Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 USDGHS EURGHS GBPGHS STRAINED FISCAL POSITION (%) Public Debt/GDP Fiscal Deficit/GDP % 53.8% 60.8% 72.2% 72.5% -12.0% -10.1% -9.5% -6.7% -8.7% Sources: Bank of Ghana, Summary of Economic and Financial Data, March 2017 Ghana Statistical Service Bloomberg 8

9 B A N K I N G S E C T O R O V E R V I E W

10 G H A N A B A N K I N G S E C T O R I N D I C E S 1 Q The banking sector currently has 33 operating banks: 17 foreign, 3 government and 13 local banks POLICY RATE¹ DEPOSITS MAR PERCENT MAR PERCENT ΔY/Y -9.6 PERCENT FEB GHS Billion FEB GHS Billion ΔY/Y 33.1 PERCENT FEB GHS Billion TOTAL INDUSTRY ASSETS FEB GHS Billion ΔY/Y 33.3 PERCENT FEB GHS Billion LOANS AND ADVANCES² FEB GHS Billion ΔY/Y 19.6 PERCENT INDUSTRY NPL RATIO INDUSTRY CAR FEB PERCENT FEB PERCENT ΔY/Y 13.3 PERCENT FEB PERCENT FEB PERCENT ΔY/Y 2.2 PERCENT Bank of Ghana, Summary of Economic and Financial Data, March 2016 & March 2017 ²Banking Sector Stability Report, March

11 1 Q P E R F O R M A N C E O F L I S T E D B A N K S 11

12 O V E R V I E W O F L I S T E D B A N K S B A N K Access Bank Ghana * Agricultural Development Bank* CAL Bank Ecobank Ghana Ghana Commercial Bank HFC Bank Societe Generale Ghana Standard Chartered Bank Ghana UT Bank T I C K E R ACCESS ADB CAL EGH GCB HFC SOGEGH SCB UTB Banking industry`s performance expected to pick up with improvements in energy supply; on-going fiscal consolidation reflected in lower treasury bill rates *Recently listed banks BANKING SEC TOR OUTLOOK Expected mergers and acquisitions to be driven by maturation of investments by financial investors and the proposed increase in bank capitalization to GHS million. Increases in the middle income class expected to boost retail banking sector 12

13 C A L V E R S U S L I S T E D P E E R S I N 1 Q / 1 Q PROFIT-AFTER-TAX (GHS mn) Q2016 1Q EGH SCB GCB SOGEGH CAL HFC TOTAL ASSETS (GHS bn) Q2016 1Q2017 EGH GCB SCB CAL SOGEGH HFC Source: Company Financials. All data as of 31 st March 2016 & 2017 respectively ADB, Access have not reported 1Q2017 results. UTB has not reported its earning since 3Q2015; 13

14 C A L V E R S U S L I S T E D P E E R S I N 1 Q / 1 Q CUSTOMER DEPOSITS (GHS bn) Q2016 1Q EGH GCB SCB CAL SOGEGH HFC LOANS AND ADVANCES (GHS bn) Q2016 1Q EGH GCB SCB CAL SOGEGH HFC Source: Company Financials. All data as of 31 st March 2016 & 2017 respectively ADB, Access have not reported 1Q2017 results. UTB has not reported its earning since 3Q2015; 14

15 C A L V E R S U S L I S T E D P E E R S I N 1 Q RETURN ON AVERAGE EQUITY (Annualised) 47.7% 45.7% 45.6% 58.5% 1Q2016 1Q % 32.7% 34.9% 32.7% 22.8% 23.6% 27.4% 15.9% SCB GCB EGH CAL SOGEGH HFC RETURN ON AVERAGE ASSETS (Annualised) 8.2% 8.1% 8.4% 7.9% 1Q2016 1Q % 5.1% 3.5% 4.5% 4.5% 2.9% 2.5% 2.8% GCB SCB CAL EGH SOGEGH HFC Source: Company Filings ADB, Access and UTB have not reported 1Q2017 results 15

16 C A L V E R S U S L I S T E D P E E R S I N 1 Q % 75.7% COST-TO-INCOME RATIO 1Q2016 1Q % 48.5% 50.4% 47.1% 56.3% 42.9% 39.1% 40.5% 31.4% 33.8% HFC GCB EGH SOGEGH CAL SCB 28.8% 28.0% NET INTEREST MARGINS 37.1% 1Q2016 1Q % 19.7% 21.6% 15.4% 13.2% 11.7% 12.1% 10.7% 11.6% SOGEGH GCB SCB EGH HFC CAL Source: Company Financials. All data as of 31 st March 2016 & 2017 respectively ADB, Access have not reported 1Q2017 results. UTB has not reported its earning since 3Q2015; 16

17 C A L V E R S U S L I S T E D P E E R S I N 1 Q / 1 Q NON PERFORMING LOANS 47.7% 42.8% 1Q2016 1Q % 16.1% 14.0% 12.0% 16.8% 17.5% 20.7% 22.0% 4.8% 9.2% SOGEGH GCB SCB EGH HFC CAL 16.5% 14.4% 25.0% 30.0% CAPITAL ADEQUACY RATIO 32.3% 19.4% 17.0% 15.5% 13.4% 12.3% 22.0% 1Q2016 1Q % SOGEGH GCB SCB EGH HFC CAL Source: Company Financials. All data as of 31 st March 2016 & 2017 respectively ADB, Access have not reported 1Q2017 results. UTB has not reported its earning since 3Q2015; 17

18 C A L B A N K F Y & 1 Q P E R F O R M A N C E

19 C A L B A N K AT A G L A N C E Q SHAREHOLDING STRUCTURE CAL Bank Limited is an indigenous bank established in Ghana in 1990, listed on the Ghana Stock Exchange SUBSIDIARIES 3 WHOLLY OWNED EMPLOYEES 792 PROFESSIONAL STAFF ROBECO AFRIKA FONDS 2.1% FRANK BRAKO ADU, JR 2.4% OTHERS 27.7% SSNIT 33.2% 27 CHANNELS CENTUM EXOTICS 2.7% ICAM 4.3% ARISE B.V. 27.7% Branches ISSUED SHARES ATMs MARKET INFORMATION¹ MARKET VALUE Active Corr. Banks PUBLIC FLOAT ADPI successfully sold 27.7% stake in CAL Bank to Arise BV (Netherlands) Arise B.V - a financial services investment company owned by Norfund, Rabobank and FMO MILLION MILLION CEDIS PERCENT 1. As at 31/03/

20 S U M M A R I Z E D I N C O M E S TAT E M E N T (GHS 000) FY 2016 FY 2015 FY 2014 ΔY/Y Interest Income 557, , , Interest Expense (306,317) (218,192) (170,943) 40.4 Net Interest Income 251, , , Fees and Commission Income 63,419 69,841 54,921 (9.2) Fees and Commission Expense (4,437) (4,511) (3,019) (1.6) Net Fees & Commissions 58,982 65,330 51,902 (9.8) Net Trading Income 43,297 70,699 76,337 (38.8) Other Income 13,584 16,357 12,755 (17.0) Operating Income 367, , ,942 (8.4) Net impairment Loss (199,243) (35,677) (20,478) Net Operating Income 167, , ,464 (54.0) Total Operating Expense (150,883) (144,031) (106,067) 4.8 Profit Before Tax 17, , ,533 (92.3) Income Tax Expense (5,313) (44,005) (45,454) (87.9) National Fiscal Stabilisation Levy (853) (11,065) (9,928) (92.3) Profit-After-Tax 10, , ,151 (93.9) 20

21 S U M M A R I Z E D B A L A N C E S H E E T (GHS 000) FY 2016 FY 2015 FY 2014 ΔY/Y Investments in Government Securities 675, , , Loans and Advances to Customers 1,966,394 1,805,285 1,337, Other Assets 724,325 1,137, ,053 (36.3) Fixed Assets 252, ,280 78, Total Assets 3,618,858 3,364,500 2,715, Customer Deposits 2,312,391 1,544,523 1,348, Deposits From Banks and Other Financial Institutions 62,803 58,309 47, Borrowings 572,810 1,113, ,455 (48.6) Other Liabilities 151, ,717 92, Shareholders Equity 519, , , Total Liabilities and Shareholders Equity 3,618,858 3,364,500 2,715,

22 C H A L L E N G E C H A L L E N G E S W E F A C E D I N W H A T W E D I D BDC sector impairments worsened Scaled down new business to BDC sector Targeted L/T relationships with other sectors i.e. mining, services, trading Recognised & wrote down impaired portion of BDC debt Continued negotiating with defaulters to recover NPL s Specific commerce sector loan impairments Comprehensive review of loan/collateral monitoring procedures Tight market liquidity resulting in interest costs growing faster than interest income Partnered with IFC to deploy Agency Banking in Q Deployed new Retail banking products and services to reduce credit concentration, boost deposits and reduce costs of funds 22

23 1Q U N A U D I T E D C O N S O L I D AT E D I N C O M E S TAT E M E N T KEY ITEMS (GHS 000) 1Q2016 1Q2017 Y/Y CHANGE 1 Profitability Key facts Net Interest Income 75,420 73,026 (3.2)% Net Fees & Commissions 18,520 10,231 (44.8)% Net Trading Income 10,315 16, % Other Income 3,113 5, % Total Income 107, ,244 (2.0)% Credit Loss Expenses (4,946) (16,445) (232.5)% Net Operating Income 102,422 88,799 (13.3)% Total Operating Expenses (41,972) (42,670) (1.7)% Profit before tax 60,450 46,129 (23.7)% Profit after tax 40,860 31,744 (22.3)% Net Interest Income declined by 3.2% y/y attributable to higher cost of funds Trading income also increased by 64.6% due to increased trading volumes and volatilities in the local currency in the quarter Credit Loss Expense increased by 232.5% due to challenges in some energy and commerce sector loans Operating expense increased marginally by 1.7% due to prudent cost control measures Profit after tax declined by 22.3% y/y due to relatively higher provisioning made in Q The Bank in partnership with the International Finance Corporation (IFC) is set to introduce Agency Banking over the next 2 years to drive non-funded income 23

24 1Q2014 1Q2015 1Q2016 1Q2017 1Q2014 1Q2015 1Q2016 1Q2017 1Q2014 1Q2015 1Q2016 1Q2017 I N C O M E S TAT E M E N T E V O L U T I O N NET INTEREST INCOME GHS mn NON-FUNDED INCOME GHS mn Other Income Net Fees & Commissions % Net Trading Income % 15.5% CREDIT LOSS EXPENSE GHS mn % 56.5% 44.9% 32.3% 52.7% % 44.5% 58.0% 31.8% 24

25 1Q2014 1Q2015 1Q2016 1Q2017 1Q2014 1Q2015 1Q2016 1Q2017 1Q2014 1Q2015 1Q2016 1Q2017 I N C O M E S TAT E M E N T E V O L U T I O N COST-TO-INCOME RATIO % NPL RATIO % NET INTEREST MARGIN % 43.0% 40.0% 39.1% 40.5% 10.0% 8.0% 8.1% 9.2% 13.0% 12.0% 12.2% 11.6% 37.0% 34.0% 31.0% 28.0% 31.1% 33.3% 6.0% 4.0% 7.0% 4.8% 11.0% 10.0% 9.0% 10.8% 10.7% 25.0% 2.0% 8.0% 25

26 1Q U N A U D I T E D B A L A N C E S H E E T KEY ITEMS (GHS 000) 1Q2016 1Q2017 Y/Y CHANGE 2 Balance Sheet Key facts Cash & cash equivalents 767, , % Trading assets 311, , % Loans & Advances 1,966,110 1,851, % Other assets 77, , % Property, Plant & Equipment 152, , % TOTAL ASSETS 3,275,619 3,940, % Customer deposits 1,597,479 2,309, % Other Deposits 61, , % Borrowings 933, , % Other liabilities 123, , % Shareholders Equity 560, , % TOTAL LIABILITIES/S.FUNDS 3,275,619 3,940, % Total Assets grew by 20.3% y/y which was largely as a result of increased investment in Government securities, reflecting the Bank s cautious approach to lending Customer deposits increased by 44.6% y/y. The growth in customer deposits was largely influenced by the successful deployment of innovative products and services rolled out as part of the Bank s Digitization Strategy Borrowings decreased by 17.5% as a number of short term-facilities to support asset growth were retired 26

27 A S S E T P R O F I L E % 80% 60% 40% 20% 0% DISTRIBUTION OF ASSETS 11.80% 15.80% 18.60% 21.00% 29.20% 37.00% 21.40% 32.00% 59.00% 47.20% 60.00% 47.00% 1Q2014 1Q2015 1Q2016 1Q2017 Loans & Advances Other Interest Earning Assets Other Assets Transport, Storage & Communicatio Commerce & n Finance 2% 22% Electricity, Gas & Water 22% 1Q 2016 Services 9% Government 12% Construction 21% SECTORAL DISTRIBUTION OF LOANS Miscellaneous 5% Agriculture, Forestry & Finishing <1% Mining & Manufacturing 4% Transport, Storage & Communication 2% Commerce & Finance 20% Electricity, Gas & Water 21% 1Q 2017 Services 12% Construction 25% Miscellaneous 7% Government 4% Agriculture, Forestry & Finishing <1% Mining & Manufacturing 7% 27

28 C A P I TA L & R E T U R N S RETURN ON EQUITY CAPITAL ADEQUACY RATIO 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 48.6% 42.9% 29.3% 23.0% 1Q2014 1Q2015 1Q2016 1Q % 22.5% 20.0% 17.5% 17.2% 22.0% 22.0% 19.5% RETURN ON ASSETS 15.0% 8.0% 7.6% 6.7% 12.5% 6.0% 4.0% 2.0% 5.0% 3.2% 10.0% 7.5% Regulatory Minimum: 10% 0.0% 1Q2014 1Q2015 1Q2016 1Q % 1Q2014 1Q2015 1Q2016 1Q

29 Volume Traded Share Price (GHS) Millions C A L S H A R E P R I C E E V O L U T I O N J A N A P R Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 0 Volume Last Price 29

30 0.50x 2.17x 1.01x 3.59x 3.36x 1.35x 4.60x 1.70x P R I C I N G E V O L U T I O N PRICE-TO-EARNINGS RATIO PRICE-TO-BOOK RATIO 1Q2014 1Q2015 1Q2016 1Q2017 1Q2014 1Q2015 1Q2016 1Q

31 D e l i v e r i n g o u r s t r a t e g y Retail Banking Deploy Agency Banking in 2017 through distribution outlets and financial service agents Develop e-payment platforms with emphasis ondigital 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. Corporate Banking People 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. 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. Leverage on growth in digital and mobile technology to develop cutting edge solutions that will offer customers Technology Risk Management & Compliance 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. 31

32 THANK YOU Q&A