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, 1. it gives me great pleasure to be here today for the official 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 strong after - tax income of gh¢825. 96 million compared with

board also moved quickly to ease monetary policy after the events of mid september, with interest rates being reduced significantly. at 3 per cent, the overnight rate is at the lowest level seen since the early 1960s. this has fed through into significant declines in the rates paid by borrowers, especially, but not only, households. the debt servicing costs of households have fallen faster and further than in previous cyclical episodes. the board has not felt the need to cut our policy rate to the very low levels – effectively zero – seen in some other countries. there are two reasons. the first is that the situation we face is not as dire. the second is that the reduction in interest rates we have implemented has had a more direct effect on borrowers than in many other countries. the combined impact of the easing of fiscal and monetary policy is likely to be substantial. quantification of the effects is very much a matter of informed judgement. the fact that australia is experiencing, so far, a smaller downturn than most countries reflects in part the relatively smaller extent of the sort of financial excesses that have been the problem in some other countries, as well as the good fortune of our position in relation to china. but significant macroeconomic policy responses will have also played a role. fiscal initiatives were not only sizeable by global standards, but implemented quickly. the impact of monetary policy easing in terms of reducing debt servicing burdens for borrowers has been greater than in the major northern hemisphere countries. the relevant question now is : what are the prospects for a durable expansion? it is likely that activity has remained subdued in the june quarter. the rapid decline in business investment is almost certainly continuing. while consumer spending has held up quite well so far, it may be weaker over the next few months, as the one - off government payments pass and rising unemployment starts to weigh on incomes and willingness to spend. on the other hand, we are likely to see significant growth in public spending over the year ahead, reflecting fiscal policy decisions. moreover, while it will be a while yet before the effects of lower interest rates and the boost to grants to first - home buyers are seen in data on construction work done, the pick - up in borrowing for housing that we have been seeing for about six months is what would be expected if an upturn in residential investment spending is to begin later in the year. overall, then, our expectation remains that the economy will be well placed for expansion towards the end of this year. initially