CALBANK LTD
OFFICAL OPENING OF NEW HEAD OFFICE BUILDING
SPEECH DELIVERED
BY DR. ERNEST ADDISON
GOVERNOR, THE BANK OF GHANA
May 22, 2019
Your Excellency the President of the Republic: Nana Addo
Dankwa Akufo-Addo,
Honourable Ministers,
The Clergy and Chiefs,
The Board Chairman and Directors of Calbank,
Senior Management and staff,
Distinguished Invited Guests,
Ladies and Gentlemen,
Good Morning,
It gives me great pleasure to be here today for the official
1.
launching of this new state-of-the-art head office for CalBank
Limited, and for the opportunity to make a few remarks on
this occasion.
2. I am delighted because this commissioning signals what a
local indigenous bank can achieve with commitment and
hard work by its dedicated workforce. I have no doubt in my
mind that this office space has a cutting edge technology
that incorporates accessibility, safety and functionality for
both staff and customers.
3. Mr. Chairman, the overall contribution of CalBank Ltd to the
banking industry in Ghana is not in doubt. It remains one of
the domestically controlled flagship banks with strong
performance in asset growth and profitability. Starting off as
a merchant bank in the 1990's and transitioning to a
universal bank in 2004, Calbank has exhibited strong growth
over the years with an increasing number of branches and
several ATMs across the country.
4. Mr. Chairman, financial services remain crucial in promoting
economic growth and reducing poverty. It is in this regard
that the Bank of Ghana has taken some tough decisions to
sanitize the financial sector over the past two years. The
objective is to position the sector as a major growth driver, to
support the much needed economic transformation of
Ghana.
5. Mr. Chairman, our banking system is becoming stronger by
the day, as the core Financial Soundness Indicators (FSIs)
suggest that the soundness and stability of the banking
sector significantly improved in the first quarter of 2019,
reflecting gains from the comprehensive set of reforms
introduced by the Bank of Ghana in 2017 and 2018.
6. The solvency position of the sector improved on the back of
the recapitalization of the banking sector and orderly
resolution of distressed institutions. As a result, the capital
adequacy ratio of the banking sector, which deteriorated into
the worst category by June 2017, significantly improved to
above 20 percent in March 2019.
7. The banking system remains profitable with a first quarter of
2019 strong after-tax income of GH¢825.96 million
compared with GH¢601.76 million for the corresponding
period of 2018. This represents an annual growth of 37
percent.
8. Liquidity levels in universal banks as at December 2018
through to the first quarter of 2019 were among the highest
recorded over the past 12 years. This can be attributed to
the increase in cash and balances due banks. Similarly,
results from the liquidity risk assessment indicate that
shocks emanating from a single largest depositor on
solvency remain well-contained in the banking industry.
9. The developments in the banking sector soundness index
also revealed an improvement in the general stability and
soundness of the banking sector reflecting improved capital
buffers, upgrade in asset quality, and enhanced liquidity
stance. Also, results from the Loan Migration and
Contraction Models stress testing also suggest that the
banking system was generally resilient to credit risks.
Similarly, results from the exchange rate and interest rate
risks stress testing revealed that unanticipated shocks may
not significantly affect the solvency condition of the entire
system.
10. Overall, the resilience of the banking industry to shocks
improved significantly in December 2018 relative to
December 2017 although fragilities exist at few individual
banks' level.
11. These positive developments on the banking sector
front should improve the efficiency in the industry which
should ultimately result in declining interest rates. With
increased capitalization of banks, and better credit risk
assessment in the banking system, we expect the pricing of
credit to reflect these trends. Interest rates and spreads that
have been slow to adjust should move in line with inflation.
12. On this note, Mr. Chairman, let me once again
congratulate the Board, Management and Staff of CalBank
Limited on the opening of this new Head office building. And
encourage the management and staff to continue to maintain
high standards of integrity, particularly in the area of its
corporate governance to maintain public confidence in
CalBank.
Thank you all for the attention.