Cal Bank explores ways to recapitalise

CAL BANK Limited, one of the indigenous banks operating in the country says it is not ruling out the possbilities of a meager or an acquisition as it strategises to meet the Central Bank’s new minimum capitalisation of GH¢60 million before the end of 2012.
Managing Director of the bank, Mr Frank Brako Adu Jnr, will, however not say which financial institution the bank would be meaging with or would be acquired by except to “those are part of a wide range of options that we are considering to meet that goal of the recapitalisation.”
In an interview with the Daily Graphic after the bank took its turn at the Ghana Stock Exchange's "Facts behind the Figures" in Accra, the Mr Adu said the bank was at the moment aiming at meeting the new capital requirement on or before the deadline of 2012 and "whatever strategy we would use to meet that requirement, the bank is open to them."
"We are not just looking at one means of raising the capital but any means that would lead us to our aim and also make us deliver value to our shareholders; be it mergers, acquisitions, amalgamations, a rights  issue, private placement or whatever, we are open to it," Mr Adu noted.
The BoG itself has been vocal on the need for local banks to consider mergers or inter-bank acquisitions as ways of raising enough capital to meet it’s revised capital base requirement of Gh¢60 million by the close of 2012.
Cal Bank in 2009 undertook a rights issue as it sought to raise an initial amount of GH¢30 million to enable it increase the bank’s stated capital to GH¢100 million and thus meet the BoG’s new GH¢60 million capital base requirement.
The issue was, however, under subscribed, with only GH¢13.91 million realised and "the allotment of any shares unsubscribed under the rights issue" as was authorised by the bank’s board of directors had also yielded only GH¢2.1million, prompting the bank to now explore other means of raising the said capital before the 2012 deadline.
The Chairman of the bank’s Board of Director’s, Mr Paarock A VanPercy, last two months told its shareholders during the bank's AGM in Accra that the bank had opened discussions with development finance institutions including Proparco and DEG  as a way of shoring up its capital to the GH¢100 million.
On the bank's performance in the first four months of this year, Mr Frank Adu Jnr said the bank's profit after tax increased by 28.53 per cent, with its Non Performing Loans (NPLs) dipping to 11.86 per cent compared to 12.32 per cent in 2010.
He added that the bank expected a 35 per cent growth in its loans within the year, noting that "though some may think that it is not aggressive enough, our past experience with NPLs has shown that in pursuing loans, you have to tread cautiously, otherwise, you would give it back."