2018 CalBank Annual Report PDF

CalBank
Content Page
Four-Year Group Consolidated Financial Summary 2
Board of Directors, Officials and Registered Office 3
Profile of Board of Directors 4
Chairman’s Report 7
Managing Director’s Report 10
Report of the Directors 15
Corporate Governance Statement 17
Report of the Auditors 22
Statements of Comprehensive Income 26
Statements of Financial Position 27
Statements of Changes in Equity 28
Statements of Cash Flows 30
Notes to the Financial Statements 31
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CalBank
FOUR-YEAR GROUP CONSOLIDATED

FINANCIAL SUMMARY
2018 2017 2016 2015
in thousands of Ghana Cedis
Interest Income 773,270 668,128 557,631 466,822

Interest Expense (351,641) (317,096) (306,317) (218,192)

Net Interest Income 421,629 351,032 251,314 248,630

Commissions and fees 69,543 68,063 67,133 65,330
Other Operating Income 28,085 43,137 48,730 87,056

Operating Income 519,257 462,232 367,177 401,016

Operating Expenses (229,616) (188,422) (150,883) (144,031)
Net Impairment Loss on Financial Assets (66,735) (54,947) (199,243) (35,677)

Profit Before Income Tax 222,906 218,863 17,051 221,308

Income Tax Expense (69,690) (65,965) (6,843) (55,070)

Profit after Taxation 153,216 152,898 10,208 166,238

Total assets 5,419,299 4,223,138 3,618,858 3,364,500
Total Deposits 3,150,053 2,497,623 2,375,194 1,602,832
Loans and Advances 2,422,952 1,853,674 1,966,394 1,805,285
Total Shareholders’ Equity 779,445 672,070 519,503 519,499
Earnings per share (Ghana Cedis per share) 0.2449 0.2793 0.0187 0.3032
Dividends per share (Ghana Cedis per share 0.0000 0.0000 0.0000 0.0970
Number of Shares (‘000) 626,585 548,262 548,262 548,262
Return on Assets 2.8% 3.6% 0.3% 4.9%
Return on Equity 19.7% 22.8% 2.0% 32.0%
Capital Adequacy Ratio 22.0% 21.9% 19.3% 21.4%
Cost-to-Income Ratio 44.2% 40.8% 41.1% 35.9%
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CalBank
CALBANK LIMITED BOARD OF DIRECTORS,

OFFICIALS AND REGISTERED OFFICE
BOARD OF DIRECTORS Paarock Asuman VanPercy (Chairman)
Frank Brako Adu Jnr. (Managing Director)
Philip Owiredu
Malcolmn Dermott Pryor
Dr. Kobina Quansah
Helen Nankani
Nana Otuo Acheampong
Mrs. Rosalind Nana Emela Kainyah
Kofi Osafo-Maafo
James Chamberlain Brenner (Resigned 30/06/18)

SECRETARY Veritas Advisors Limited
Acquah Place
68 Mahogany Cresent
Akufo-Addo Residential Area
P.O. Box CT 9376, Cantonments.
Accra
Ghana
SOLICITORS Reindorf Chambers

61 Jones Nelson Road
Adabraka
P. O. Box 821
Accra
Ghana
AUDITORS KPMG
Marlin House
13 Yiyiwa Drive
Abelenkpe
P.O. Box GP 242
Accra - Ghana
REGISTRAR Central Securities Depository (GH) Limited

4th Floor Cedi House
Liberia Road
PMB CT 465, Cantonments
Accra
Ghana
REGISTERED OFFICE 23 Independence Avenue

P. O. Box 14596
Accra
Ghana
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CalBank
BOARD OF DIRECTORS
Mr. Paarock A. VanPercy - Chairman
Mr. Van Percy, age 59 is an Investment Banker. He is a Chartered Accountant

by training and is a Fellow of the Institute of Chartered Accountants in England
& Wales. He is the Chairman of CAL Asset Management Company Limited
and holds directorships on the Boards of the Liberia Bank for Development
and Investment, Sierra Leone Investments Limited, Afri-Invest Management
Company Limited, and Afri Holdings Limited. He is also the Principal Consultant
of Afri Telecommunications & Media (ATM).
Mr. Frank B. Adu Jnr. - Managing Director

Mr. Frank Adu Jr, age 56, is the Managing Director of CalBank Limited with
over 28 years’ experience in the banking industry. He is the Chairman of
The Roman Ridge School and serves on the Advisory Board of the College
of Humanities of the University of Ghana and is a member of the Governors
of Presbyterian Boys Secondary School. He is a member of the Boards of
the Foundation for Orthopaedics and Complex Spine, Metropolitan Life
Ghana Limited and Quality Insurance Company Limited. He also serves on
the Board of Legacy Bond Limited, a special purpose vehicle set up for the
repayment of debt owed by the Ghana Government to the Bulk Distribution
Companies (BDCs). Frank holds a Bachelor of Arts (Hons.) in Geography, an
MBA (Finance) and an Honorary Doctorate Degree from the University of
Ghana. He is an Honorary Fellow of the Chartered Institute of Bankers and
also an alumni of the Oxford Strategic Leadership Programme, SAID Business
School, University of Oxford.
Mr. Philip Owiredu - Executive Director
Mr. Philip Owiredu, age 52, is the Chief Finance Officer/Executive Director of
CalBank Limited and has varied experiences spanning over twenty-six years
in accounting, finance and banking. Prior to his current position, he was the
General Manager and Financial Controller of the Bank, joining from KPMG,
a leading firm of chartered accountants, management consultants and tax
advisers in Ghana. Mr. Owiredu serves on the board of CalAsset Management
Limited and is a fellow of the Association of Chartered Certified Accountants.
Dr. Kobina Quansah - Non-Executive Director
Dr. Kobina Quansah, age 75, a retired seasoned banker, and was the first
Ghanaian Managing Director of Barclays Bank Ghana. He is currently
Chairman of Vodafone Ghana. He is a director of Newmont Ghana Gold
Limited and Pioneer Aluminum Kitchenware Limited. He serves as a
Non-Executive Director on the Board of Jubail Specialist Hospital
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CalBank
BOARD OF DIRECTORS
Mr. Malcolmn D. Pryor - Non-Executive Director
Mr. Pryor, age 72, has worked as an Investment Banker for thirty-four
years. He began his career as an Institutional Fixed Income Salesman with
Goldman Sachs & Co. He was Chief Executive Officer of Pryor, Counts &
Co. Inc. for twenty- four years. He was the Chief Executive of a Private
Equity Fund investing in the Southern Africa region (SAEDF). He has been
a principal investor in West and Central Africa since 1987, principally in the
financial services sector and he is a founding shareholder of CalBank.
Mrs. Helen Nankani - Non-Executive Director
Mrs. Nankani, age 72, is a retired Senior Economist who worked with the
World Bank for eighteen (18) years. She was one of the pioneers of the
World Bank’s work on Privatization of Public Enterprises, and Private Sector
Development. She managed projects aimed at determining the economic and
financial feasibility of private participation in the water sector principally in
South Asia, the Caribbean and Brazil, where she lived for four years. Prior
to joining the World Bank, she worked as a consultant with Arthur D. Little
Inc., Cambridge, Massachusetts, and The United Nations, New York, N.Y. She
was also a partner at Financial Development Services, a consulting firm in
Arlington, Virginia in the USA. She studied at the University of Ghana, Legon
(B.A. Sociology), George Washington University (M.B.A Finance), Harvard
University, Cambridge, Massachusetts (Ph.D. candidate, Economics). She is
fluent in Portuguese.
Mr. Kofi Osafo-Maafo - Non-Executive Director
Mr. Kofi Osafo-Maafo, age 49, is the Deputy Director General, Investment
& Development at Social Security & National Insurance Trust (SSNIT) of
Ghana. Kofi has 24 years’ experience in the Investments Industry. 22 of
those years in the UK Investment Management and Investment Banking
Industries, where he was responsible for advising leading global investment
management firms about their investments across a wide range of sectors,
mainly the Oil and Gas and Mining Sectors, across global markets. Prior
to joining SSNIT he was a Senior Investment Manager with Pictet Asset
Management, the investment arm of the leading Swiss private bank The
Pictet Group. Kofi started his career at the Abu Dhabi Investment Authority,
London and has held senior roles at F&C Asset Management, and HSBC
Global Asset Management’s active Investment Management arm, Halbis
Capital. Whilst working for global fund management houses, Kofi was
responsible for portfolio restructuring and construction, asset allocation,
equity strategy across funds and global sectors, managing funds, and stock
selection. He has also worked as an Investment Banker/Director with
responsibility for European Oil Exploration and Production companies at
the investment banking arm of Unicredit Bank in London. Kofi has a BSc
(Honours) in Economics from Queen Mary, University of London, and a
Masters in International Business and Finance from University of Reading.
He is an Associate of the UK Society of Investment Professionals (ASIP).
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CalBank
BOARD OF DIRECTORS
Nana Otuo Acheampong - Non-Executive Director
Nana Otuo Acheampong, age 69, is a Banking Consultant and the former
Executive Head of the Osei Tutu II Centre for Executive Education & Research
in Ghana. Prior to this appointment, he headed the Faculty of Financial
Reporting and Investment Banking at the National Banking College for four
years, where he headed various subcommittees. He has under his belt, a raft
of consultancy engagements spanning both the private and public sectors,
principally in banking. He conceptualized and finalized the code of ethics
document for the Ghana Association of Bankers – 2011 Ghana Association
of Bankers Conduct of Business Standards [GABCOBS] - Setting standards
for intra-bank ethical behaviour. He formerly chaired the Award Planning
Board of the Ghana Banking Awards. He holds an undergraduate degree in
Accounting and a postgraduate diploma in Management from University of
Northumbria in Newcastle as well as an MSc in Accounting & Management
Science from the University of Southampton, all in the UK. He was a Senior
Lecturer in Finance at the University of Portsmouth in UK from 1990 to
2004. He serves on other Boards including the Board Chair for the Health
Facilities Regulatory Agency (HeFRA) and Board member for the Graphic
Communications Company Group Ltd.
Ms. Rosalind Nana Emela Kainyah - Non-Executive Director

Ms. Rosalind Nana Emela Kainyah, age 62, is a lawyer by profession and
Managing Director of Kina Advisory Limited. Rosalind is a trusted advisor
to global companies on responsible business investment and partnerships
in Africa. She has extensive experience in Government relations, political
risk management, social investment and corporate and environmental
law, focusing on the mining and oil industries in Africa. She has held senior
positions with Tullow Oil plc and De Beers and advised governments on
policy and legislative matters. Rosalind is a Non-Executive Director of
the Norwegian oil company, Aker Energy AS and Vice Chairperson and
Trustee of the Africa Gifted Foundation. She holds a BA (English) from
the University of Ghana and an LLM from University College, University
of London. She was called to the Bar of England and Wales (Gray’s Inn)
in 1988 and is a member of the Chartered Institute of Arbitrators.
Mr. Jojo Acquah
Company Secretary
Veritas Advisors Limited
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CalBank
CHAIRMAN’S REPORT
Introduction Our performance has been underpinned by our digital

Distinguished Shareholders, on behalf of the Board of transformation agenda which formed part of our three-
Directors, I welcome you all to the Annual General Meeting year Strategic Plan which ended in 2018. We were
of CalBank Limited for the year ended 31st December able to achieve a substantial number of the planned
2018. strategic initiatives, however with the accelerating pace of
transformation in technology we have developed another
Following your approval on the 17th December 2018 at the three-year strategy running till December 2021 which
Emergency Shareholders Meeting for the final transfer of seeks to build a “digital bank”. This we consider very core
GH¢50 million to stated capital from income surplus, I am to our future growth and development.
glad to inform you that your Bank was able to meet the
minimum capital requirement before the 31st December Economic Review
2018 deadline by the Central Bank. The resulting The economic recovery experienced since the second
rationalisation of the banking sector should ensure that half of 2017 continued into the review period reflecting
banks are now better positioned to operate efficiently and improved economic indicators despite some challenges.
profitably, and we are happy that CalBank is part of this. Headline inflation continued to decline to 9.4% at the end
of the year from 11.8% the previous year, attaining the
During last year’s AGM, I alluded to the sterling performance single digit benchmark. This among other positive factors
following our promise to get back on track after a difficult underpinned the decision of the Central Bank to reduce the
2016. I am happy to confirm that the measures we took policy rate to 17% at the end of December 2018 from 20%
to ensure a turnaround continue to yield positive results the preceding year. In spite of this, the benchmark 91-day
as evidenced in our financial performance yet again, and treasury bill rate increased from 13.3% the previous year
we expect steady growth in the years ahead. This will to 14.6% in December 2018. Also, the Cedi depreciated
be supported by the focused execution of our strategy against all the major trading currencies - 8.4% against the
that embraces digital technology to bring out exciting US dollar, 3.3% against the Pound sterling and 3.9% against
opportunities to our customers and other stakeholders. the Euro during the review period, and has continued to
depreciate this year.
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CalBank
CHAIRMAN’S REPORT (Continued)
The overall GDP growth for 2018 is projected at 5.6%. Total Assets
We expect this to improve going forward as lending picks 6,000,000

up to drive the economy following the banking sector 5,000,000
Ghana Cedis'000
reform. This uptick in lending is expected to be stimulated 4,000,000
by the growth in industrial activities and a robust consumer 3,000,000

2,000,000
demand.
1,000,000
0
Financial Review 2016 2017 2018
Despite the challenged operating environment, your Bank
was steadfast in its pursuit for robust growth and sustainable
profitability. This has been anchored on a commitment to Capitalisation
prudent risk management and sticking with the strategic Although your Bank has met the minimum capital
direction of the enterprise. requirement of GH¢400 million, the Central Bank has
introduced a further determination of capital in accordance
The Bank recorded a profit after tax of GH¢162.9 million, with international Banking Supervision Accords/Regulations
an increase of 12.2% over the prior year’s profit of under the Basel II/III framework, which is a more stringent
GH¢145.2 million. The Group also recorded a profit after basis of capital determination. This took effect from 1st
tax of GH¢153.2 million, an increase of 0.3% over the prior January 2019. This requirement increases the minimum
year’s profit of GH¢152.8 million, depicting the continuous Capital Adequacy Ratio (CAR) from 10% to 13%, with higher
progress made in line with our strategic agenda. capital charges and covers a wider spectrum of the Bank’s
operations into some detail. In order to ensure that your
Bank will meet the minimum CAR over the medium term,
Group Profits we simulated the Bank’s capital requirements using our
projections for the planned strategic period and it became
250,000
200,000
imperative that we need to raise additional capital in the
Ghana Cedis'000
150,000 very near future to ensure we do not breach regulatory

100,000 capital requirements.
50,000
0
PBT PAT
2016 2017 2018

Performance of Cal Bank Stock
1.20
1.00
The group’s total assets increased by 28.3% from GH¢4.2
Share Price (GH¢)
0.80
billion to GH¢5.4 billion. This growth was achieved through 0.60
the effective deployment of resources sourced from 0.40
depositors and our long term finance partners during the 0.20
0
year. IPO Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec
Price '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Our stock price however, dropped from GH¢1.08 at the

end of 2017 to GH¢0.98 at the end of 2018 in spite Dividend
of our improved performance and meeting the Bank of Our dividend policy balances the dual objectives of
Ghana minimum capital deadline ahead of schedule. It is appropriately rewarding shareholders through dividends
our expectation that the stock price would reflect its true and reinvesting profit to support future growth. In line
value as we continue to execute our building a “digital with this policy, we transferred a total of GH¢300 million
bank” strategy. from income surplus to sustain our business by meeting
the minimum capital requirement as set by the Central
Bank to maintain our license and support future growth.
Through this transfer we also issued bonus shares valued
8
CalBank
CHAIRMAN’S REPORT (Continued)
at GH¢78.3 million in the ratio of 1 share for every 7 held, and Mrs. Helen Nankani retire by rotation and are eligible
representing a payout ratio of 54% of profit after tax for for re-election.
2017 and a dividend per share of GH¢0.1428 compared to
GH¢0.0970 paid for 2015, an increase of 47%. Outlook
I look forward to 2019 with reasonable optimism especially
However, based on our projected capital requirements following the banking sector reforms and prospects of a
as enumerated above and regulatory requirements, we favorable domestic and global economic outlook. I know
are restricted to the amount that can be paid in dividend. that we have the right business strategy in place and the
Your Directors are recommending a dividend payment of required people to effectively exploit the emerging business
GH¢0.048 per share. opportunities and deliver commendable stakeholder value.
Corporate Governance We will continue to leverage on technology to take our

Sound and effective corporate governance is essential business closer to our customers to underpin our quest
for the long-term success of the Bank. The Board to create sustainable value while maintaining our focus
therefore remains committed to fulfilling its corporate on minimizing and diversifying risk, as well as improving
governance obligations and responsibilities in the best productivity and efficiency.
interest of the Bank and its shareholders. The CalBank
Board Charter establishes the framework through which Conclusion
our responsibilities are executed and also the basis for On behalf of the Board I wish to express our sincere
evaluating our performance. appreciation to our valued customers for their continued
support and patronage over the years. To our shareholders,
The Central Bank has introduced its Corporate Governance I am grateful for the support and encouragement we
Directive (CGD) to serve as a guide to best corporate continue to receive from you and I am confident that we
governance practices. The CGD requires certain changes can continue to count on this support in the years ahead.
to be made by your Bank, although to a large extent our
practices are in accordance with majority of the directives. My appreciation also goes to my colleague Board members
The CGD stipulates deadlines for meeting some of the for their commitment and counselling which has inured to
changes and your Board has put in place the necessary the benefit of the Bank. I also wish to thank our Regulators
steps to ensure full compliance. for their continued support and guidance.
Your Board is mindful of the effects of good corporate And finally, I commend management and staff of the Bank
governance and will continue to anticipate and respond to for their tireless and consistent efforts in our success story,
corporate governance developments in the best interest of I know I can continue to count on you to make 2019 even
all stakeholders. better.
Directorship Ladies and Gentlemen, I thank you all for your kind
The Board is comprised of a diverse and dedicated group attention and I wish you a rewarding year ahead as we
of Directors who bring sound business insight and expertise look forward to delivering strong and consistent results.
to your bank.
During the course of the year, Mr. Jim Brenner a Non- Paarock VanPercy
Executive Director of your Bank, resigned his position Chairman
effective 30th June 2018. We take this opportunity to
thank Mr. Jim Brenner for his immense contribution to the
growth and development of the Bank and wish him all the
best in his endeavors.
In accordance with statutory requirements and the Bank’s

regulations the following Directors, Mr. Malcolmn Pryor
9
CalBank
MANAGING DIRECTOR’S REPORT

“Your legacy should be that you made it better than it was when you got it.”
Lee Iacocca – Chairman and CEO, Chrysler Corporation
Introduction 2018 and real GDP growth prospects remain favorable

2018 was another successful operational and financial year going forward, underpinned by a continued ramping up
for our Bank in spite of increased competitive pressures of oil and gas production from the Tweneboa-Enyenra-
and an elevated regulatory requirement regime. We Ntomme (TEN) and Sankofa fields. Inflation trended
have become a strong and better Bank underpinned by downwards from 11.8% in December 2017 to 9.4% in
technology, innovation, enhanced risk management and December 2018, this trend has continued into 2019 with
controls, and a strong capital position which are necessary January 2019 inflation recorded at 9.0%. This consistent
ingredients for our continuous growth to enable us deliver reduction in inflation among other factors resulted in a
sustainable returns to all our stakeholders. I am indeed drop in policy rate from 20% in December 2017 to 17%
excited about our accomplishments as we were able to at the end of December 2018, and a further reduction
balance competing demands for short term results with by 100 basis points to 16% at the last MPC meeting held
creating medium to long term value. in January 2019. The interest rate equivalent on the 91-
day Treasury bill however increased to 14.6% in December
The global economy experienced moderating activity 2018 from 13.3% in December 2017. The strengthening of
and heightened risks during the course of the year as the US dollar and increased domestic demand pressures
the recoveries in trade and manufacturing activities lost adversely impacted our local currency resulting in the Cedi
steam. Trade tensions remain elevated in spite of ongoing depreciating by 8.4% in 2018.
negotiations. The prolonged US presidency investigation
into possible collusion with Russia during the 2016 The overall fragility of the global economy and a rebound
presidential election, partial US government shutdown of the domestic economy presented both opportunities
and on-going Brexit negotiations are some significant and associated risks on our business during the year. We
geopolitical concerns during the review period with likely strategically positioned ourselves to take advantage of
impact on growth. these opportunities and rigorously focused on enhancing
our risk management fundamentals which has reflected in
Domestically the economy grew by an estimated 5.6% in the good results for the review period.
10
CalBank
MANAGING DIRECTOR’S REPORT (Continued)
We ended the implementation of the first three years in 2018 with the Bank’s total assets also increasing by
of our “digital transformation” strategic agenda at the 28.3% to GH¢5.41 billion. This growth was mainly funded
end of 2018 under which significant gains were made by customer deposits and borrowings which increased
leading to the development of various products and the by 26.8% and 41.7% to GH¢3.1 billion and GH¢1.3 billion
re-engineering of processes to enhance efficiency and respectively.
effectiveness. A new three-year strategic plan themed
“building a digital bank” has commenced which builds Total Deposits
on the achievements of our earlier strategy that set the
4,000,000
foundation for our digitization agenda to transform our
Ghana Cedis'000
organization into a platform through which our customers 3,000,000
can build their businesses and access all the resources of 2,000,000
the Bank through technology to make their lives better. 1,000,000
0
Financial Performance 2016 2017 2018
Notwithstanding the improving domestic economy, last Savings Time Current
year was still a tough year for banking business reflecting
increased competitive pressures and elevated regulation.
Our good momentum from the effective implementation Through our debt raising strategy to support the growth
of our strategy can be seen from the strong performance of our loan portfolio, we raised a total of US$105 million
by the Bank and the Group. from the following institutions; IFC, Norfund, Finnfund and
Proparco. We will continue to deepen the relationship with
During the year, the Bank recorded a profit before tax of the international community to leverage available funding
GH¢230.3 million with the Group recording a profit before for our growth. We will continue to leveraging technology
tax of GH¢222.9 million the diminution reflecting payment to enhance our channels and products to drive customer
of dividend by the subsidiary companies upon consolidation. growth and increase deposits.
The profit after tax amounted to GH¢162.9 million for the
Bank and GH¢153.2 million for the Group. This out turn Gross loans increased by 29.6% to GH¢2.5 billion, up from
was achieved in spite of the challenges presented in the prior year value of GH¢2.0 billion. This increase reflects
operating environment already enumerated and our ability our continued strong and healthy engagement in the credit
to maintain our cost efficiency over the period by leveraging market, helping our customers enhance their businesses by
technology to optimize internal business processes. This is providing them with facilities to fund projects, businesses
evidenced by a cost to income ratio of 42.9% and 44.2% and individuals needs in high growth sectors of the
for the Bank and Group respectively. economy. We are mindful of the potential adverse impact
of deterioration in credit quality on our capital, stringent
measures are therefore in place to ensure we maintain
Operating Income a good credit portfolio. This had a positive impact on our
business and is duly reflected in our non-performing loans
600,000
ratio of 8.0% as compared to the prior year ratio of 10.9%.
500,000
Ghana Cedis'000
400,000
300,000 Net Loans and Advances

200,000
2,600,000
100,000
2,400,000
Ghana Cedis'000
0 2,200,000
2016 2017 2018 2,000,000
1,800,000
Other Income Commission & Fees Net Interest Income 1,600,000
1,400,000
1,200,000
1,000,000
Our financial position experienced robust growth during 2016 2017 2018
the period. Total assets of the Group increased by 28.3%

during the year, from GH¢4.22 billion to GH¢5.42 billion
11
CalBank
We continue to actively manage our enhanced capital owned or women led businesses. These measures have
position to ensure we maintain an appreciable level of deepened the opportunities available to our staff for career
capital at all times to carry out our business to deliver progression within the Bank.
sustainable value to our shareholders. We maintained a
capital adequacy of 21.8% and 22.1% for the Bank and In consonance with the Sustainable Development Goals
Group respectively, above the regulatory limit of 10% which (SDG) of the United Nations, we have also secured funding
provided ample buffer against potential shocks. in the region of US$50 million for women, sustainable and
renewable energy. Effectively CAL has taken 2 of the 17
We are however required to implement the capital goals of the SDGs as key strategic focal points.
requirements under Basel ll/lll effective 1 January 2019
which has a more stringent capital allocation requirement To demonstrate our commitment to building a digital bank,
and an enhanced minimum ratio of 13%. Based on our we continue to invest in our systems and people. Our agent
31 December 2018 statement of financial position our banking offering, which is a partnership between the Bank
ratio under the Basel II/III was 13.5%, a thin margin above and IFC has been completed, full commercial launch is
the minimum requirement. This obviously raises the need expected before the end of Q2 2019. This product takes us
for additional capitalization to ensure we meet regulatory significantly closer to our customers without investments
requirements. Basically a change in methodology for the in brick and mortar. The CalBank prepaid cards (VISA and
determination dropped our CAR from 22.1% to 13.5% MASTERCARD) have also been developed and introduced
overnight. into the market to offer safety and worldwide functionality
for our cherished customers. We have also enhanced our
internet banking platform to enable customers carry out
Shareholders' Funds
transactions without physical interaction and afforded them
the opportunity to take full control of their banking needs.
800,000
700,000
Additionally, we have leveraged our enhanced technology
to develop and deploy collection solutions to enhance the
Ghana Cedis'000
600,000
500,000
mobilization of cheap deposits through hand held devices
400,000
300,000 and interfaces made available to our customers which
200,000 includes school fees collections.
100,000
0
2016 2017 2018 As part of our PCI-DSS certification we are required to
be recertified annually which we successfully did during
Operational Performance the year. To further enhance our information security
2018 was a year of continued consolidation of the success environment, the Bank went through the ISO27001
of our digital transformation strategy as we ensured certification which was also successfully completed early
the Bank’s operations were improved to the benefit of this year and are awaiting certification. The Bank subjects
our customers than ever before, thus expanding our itself to these certification processes to ensure that we
ecosystem and deepening our value proposition to our are compliant with international best practices and have in
customers. We restructured our organizational chart in place robust and reliable information systems platform and
line with our institutional growth to leverage the diversity processes for the protection of our assets and customers.
of talent across the Bank to drive our strategy, resulting
in various appointments including a Chief Risk Officer to I am delighted to inform you of the completion of our
oversee all risk activities of the Bank, the creation of the new ultra – modern smart green building befitting of our
Information Security Department to help safeguard our status of an indigenous Ghanaian Bank delivering world
information assets whiles at the same time ensuring a class services to all stakeholders. We fully migrated into the
secured environment for our customers to conduct their new building at the end of November 2018 and have the
business as well as enhance our risk management culture. full complement of all our departments and subsidiaries
We have set up the Financial Inclusion Department to together in one location further enhancing our ability to
drive our digital and e-products and created the Women’s achieve synergies within our Group. We also increased
Banking Unit to focus attention on developing women our footprint with the addition of our Adum branch in the
12
CalBank
Ashanti Region to take our branch network to 29 and the An impact assessment on the implementation of IFRS
set-up of the Anyinase agency in the Western Region to 16 – Leases, on capital has also been carried out, full
enhance cash collections. implementation commences in 2019
These could not have been achieved without a healthy The banking sector reforms initiated by the bank of
workforce as we instituted health awareness programs Ghana in 2017 peaked at the end of 31 December 2018
and medical reviews for all staff annually including health with the recapitalization of Banks. This resulted in some
walks, stress management workshops, dieting and medical consolidation in the banking sector with the number of
screening for some diseases to ensure that staff remained Banks reduced to twenty-three arising out of the merger
in the best of shapes at all times. We take very good care of some Banks and the revocation of some licenses. As
of our staff and staff welfare is paramount. indicated by the Chairman the sector is better positioned to
support economic growth with stronger and more resilient
Regulation Banks.
The year under review was a busy year in the Banking
history of Ghana in terms of regulation as the Bank of Corporate Social Responsibility
Ghana continued its banking sector reforms initiated in CalBank is committed to corporate social responsibility
2017. The Bank of Ghana issued the Capital Requirements where integrating sound environmental and social practices
Directive (CRD) which requires Banks to hold appropriate remains a key component of our day-to-day business
capital to absorb unexpected losses that may arise from activities. Our thematic areas of community involvement
the operations of their business and sets the tone for Basel include education for needy children, healthcare, sports
II/III implementation. The CRD stipulates the dictates by development and culture.
which Banks are required to calculate their capital adequacy
ratio. We continue to contribute to the development of education
in the country with emphasis on improving the level of
The Bank of Ghana also issued the Corporate Governance education of the underprivileged. The Bank continued
Directives and as the Chairman has already enumerated, with our annual “time with the needy child” project, an
this is to highlight the oversight responsibilities of the board initiative through which staff of the Bank offer help with
of directors and management, prioritize risk management the upkeep of needy children. Beyond staff involvement,
systems, ensure independent audit roles and impose term the Bank has supported over 10,000 needy children from
limits for directors among others. 20 needy homes across the country. Over the years, the
Bank has supported the best graduating students of various
During the year, Banks were made to submit plans to Bank universities and has awarded scholarships to a host of
of Ghana to address non-performing loans, which was brilliant but needy students with a current sponsorship of
followed up with the enforcement of the loan write-off over 26 orphans through tertiary education.
directive and required appropriate disclosure of written-off
facilities in the published financial statements. We complied During the year, the Bank donated an ultra-modern 3-unit
fully and have duly disclosed the approved write-off’s in neonatal equipment to the children’s ward at the New
our financial statements. Tafo Government Hospital in the Eastern region as part of
our “new care project” initiative that seeks to enhance the
The Cyber and Information Security Directive has also been
quality of maternal and neonatal health services through
issued to provide a framework for establishing cyber and
the provision of neonatal equipment to hospitals across
information security protocols and procedures to manage
the Country. The Bank has also procured another set for
and protect valuable data and information assets. We have
the Axim Hospital and St Martins De Pores Hospital in the
taken steps to fully implement this directive to add another
Western region as well. This initiative will carry on every
layer of security in our risk management process.
year going forward.
We have fully implemented IFRS 9 – Financial Instruments,

We continued our sponsorship of the National Beach Soccer
as promulgated by the International Accounting Standards
Championship as part of our efforts aimed at developing
Board (IASB) and Bank of Ghana’s directive for Banks to
and promoting least financed and lesser known sports in
implement IFRS 9 to address the accounting of financial
the Country.
instruments.
13
CalBank
Subsidiaries Conclusion
Our subsidiaries continue to play relevant roles to The path to transformation which we seek to attain by
enhance synergies within the Group. CalBrokers building a Bank that leverages technology is tortious,
Limited and CalAsset Management Limited but necessary for our sustained growth. There is a
contributed a total of GH¢5.2 million to the Group’s lot of work ahead in further strengthening our risk
profitability, representing 3.3% of the Group’s profit management to ensure we protect the gains we
after tax during the review period. have made over the years, increasing our pace and
taking our business to our customers wherever they
Funds under management by the group increased find themselves through the effective collaboration
to GHS908.2 million from GH¢880.6 million the of our Development Financial Institutions, regulators
previous year, an increase of 3.1%. and our highly committed staff.
CalNominees Limited continues to manage our I am truly grateful to our customers, our shareholders
custody offering. Assets under custody increased and fellow Board members for their trust. I also
to GH¢1.5 billion from GH¢1.2 billion at the end of want to thank my colleagues for their hard work
the previous year. This was attained in spite of a over the past year to deliver the strong results we
reduction in client base from 39 in 2017 to 34 at see today.
the end of 2018 as the competition towards gaining
a significant share of the pension funds custody As we move into 2019 on this journey, we will
market heats up. The custody business remains an achieve greater goals together.
important strategic priority for the Group and we
see growth opportunities ahead. Thank you and God bless us all.
Frank Brako Adu Jnr.

Managing Director
14
CalBank
REPORT OF THE DIRECTORS

TO THE MEMBERS OF CALBANK LIMITED
The Board of Directors has the pleasure to submit this report of the group for the year ended 31 December 2018.
Statement of Directors Responsibilities

The directors are responsible for the preparation of the consolidated and separate financial statements for the financial
year, which give a true and fair view of the state of affairs of the Group, the consolidated and separate statement of
profit or loss and consolidated and separate statement of cash flows for the year. In preparing these financial statements,
the directors have selected and applied consistently suitable accounting policies, made judgements and estimates that are
reasonable and prudent and followed International Financial Reporting Standards. The directors have made an assessment
of the group’s ability to continue as a going concern and have no reason to believe the Group will not be a going concern
in the year ahead.
Financial Statement 2018 2017

Profit for the year ended 31 December 222,906 218,863
From which is deducted taxation of (69,690) (65,965)
giving a profit for the year after taxation of 153,216 152,898

to which is added balance on retained earnings brought forward
(excluding amounts transferred to Regulatory Reserves) of 301,133 162,464
IFRS 9 transition adjustment (17,086) -
Transfer from regulatory credit risk reserve 17,086 -
leaving a balance of 454,349 315,362

Transfer to stated capital (300,000) -
Transfer from credit risk reserve 18,741 3,917
Tax charge on transfer to stated capital (17,954) -
Less transfer to regulatory reserve (81,470) (18,146)

giving a cummulative amount available for distribution of 73,666 301,133
Nature of Business
The nature of business of the Group is as follows:
• To carry on the business of banking;
• To carry on the business of underwriters of securities, finance house and issuing house;
• To undertake corporate finance operations, loan syndications and securities portfolio management;
• To engage in counseling and negotiation in acquisitions and mergers of companies and undertakings;
• To engage in the business of acceptance of bills of exchange, dealing in bullion, export trade development and
financing;
• To carry on the business of hire-purchase financing and the business of financing the operations of leasing companies;
and
• To engage in the counseling and financing of industrial, agricultural, mining, service and commercial
ventures, subject to the relevant rules and regulations for the time being in force on that behalf.
15
CalBank
REPORT OF THE DIRECTORS (Continued)
Substantial Shareholders
Details of the Bank’s twenty largest shareholders are disclosed in Note 34 of the Annual Report
Retirement and Re-Election of Directors

The following directors of the company, Mrs. Helen Nankani and Mr. Malcolmn Pryor will retire in accordance with section
298(a) of the Companies Act, 1963 (Act 179) and Regulation 78(b) of the Regulations of the company.
Subsidiaries
CalBrokers Limited, a company incorporated in Ghana as a securities broker and a licensed dealing member of the Ghana
Stock Exchange.
CalAsset Management Company Limited, licensed to manage assets by the Securities and Exchange
Commission.
CalBank Nominees Limited, incorporated in Ghana to hold and administer securities and other assets as a custodian
(registered owner) on behalf of beneficial owners.
CalTrustee Limited incorporated in Ghana to manage pension funds on behalf of beneficial owners as per guidelines set
out by National Pension Regulatory Authority (NPRA)
Associated Undertakings
Ghana Leasing Company Limited (a non-banking financial institution) and Transaction Management Services Limited (in
liquidation) both incorporated in Ghana are associated undertakings of the Bank. These investment have been fully impaired
from the Bank’s book.
Going Concern
The Board of Directors have made an assessment of the Bank’s ability to continue as a going concern and is satisfied that
it has the resources to continue in business for the foreseeable future. Furthermore, the Directors are not aware of any
material uncertainties that may cast significant doubt upon the Bank’s ability to continue as a going concern. Therefore, the
financial statements continue to be prepared on the going concern basis.
Dividend
The Directors recommend the payment of a dividend of GH¢0.048 per share. Bonus shares in the ratio of 1:7 valued at
GH¢78.3 million was issued to shareholders in lieu of cash dividend as part of our capitalisation in 2018.
Auditors
In accordance with Section 134(6) of the Companies Act, 1963 (Act 179), KPMG will remain in office as auditors for the
group.
Acknowledgement
The Board of Directors hereby expresses its sincere appreciation for the support, loyalty and dedicated service of the staff,
management and all stakeholders of the Bank over the past year.
BY ORDER OF THE BOARD
Frank B. Adu Jnr. Paarock A. Vanpercy

Director Director
Dated: 27 February 2019
16
CalBank
CORPORATE GOVERNANCE STATEMENT

Introduction The Board of Directors is made up of a Non-Executive
The CAL Bank Group is committed to fulfilling its corporate Chairman, six (6) Non-Executive directors and two (2)
governance obligations and responsibilities in the best Executive Directors. The Group is committed to ensuring
interests of all stakeholders by ensuring that its policies and that the composition of the Board continues to include
practices reflect a high standards of corporate governance Directors who bring an appropriate mix of skills, experience
practices based on fairness, transparency and accountability. and diversity to Board decision-making in both current and
We remain committed to the continual strengthening of emerging issues.
governance within the Group, reflecting our efforts toward
building a sustainable business in accordance with our long The roles of the Chairman and Managing Director are
term strategic objectives. distinct and separate, with a clear division of responsibilities.
The Chairman leads the Board and ensures the effective
CAL Bank Limited (the “Bank”) which is the parent engagement and contribution of all executive and non-
company of the Group has CAL Brokers Limited, CAL executive directors. The Managing Director has responsibility
Asset Management Limited, CAL Bank Nominee Limited for all Group businesses and acts in accordance with
and CAL Trustee Company Limited as subsidiaries, each the authority delegated by the Board. Responsibility for
subsidiary company having an independent Board of the development of policy and strategy and operational
Directors. management is delegated to the Managing Director.
Compliance and Regulations All directors participate in discussing strategy, performance,

Compliance with applicable legislation, regulations, financial and risk management issues of the Group,
standards and codes remains an essential characteristic meetings of the Board are structured to allow sufficient
of the Group’s culture. The Board of Directors monitors time for consideration of all items through constructive
compliance with these by means of management reports. deliberations.
Information on the outcomes of any significant interaction
with key stakeholders such as the Bank’s regulators is also In addition to its statutory responsibilities, as enshrined
provided to the Board. under the Companies Act, 1963 (Act 179), the Banks
and Specialised Deposit-Taking Institutions Act, 2016 (Act
In December the final corporate governance directives 930), the Corporate Governance Directive (2018) and the
was issued by the Bank of Ghana, the Board of Directors Regulations of the Bank, the Board is also guided by a
will ensure full compliance with the various dictates of the voluntary Board Charter adopted by the Bank, which sets
directives. out in further detail the individual duties and responsibilities
of the Chairman and members of the Board, the Company
The Group complies with all applicable legislation, Secretary and the Board as a whole.
regulations, standards and codes in Ghana. There is regular interaction between the Board and
executive management. The Board meets once every
The Board quarter in closed sessions, employees are invited as
The Board of the Bank is the ultimate decision-making required to make presentations to the Board on material
body for the Group. It has overall responsibility for issues under consideration. Directors are also provided
management of the business and affairs of the Group, the with unrestricted access to management and company
establishment of Group strategy and the allocation and information, as well as resources required to carry out their
raising of resources, and is accountable to shareholders for responsibilities.
financial and operational performance. The Board provides
effective leadership, considers strategic issues, ensures Meetings of the Board are held quarterly with an additional
the Group manages risk effectively through approving meeting to consider Group strategy. The Board of Directors
and monitoring the Group’s risk appetite and exercises are provided with comprehensive board documentation at
judgement in guiding management to achieve growth and least one week prior to each scheduled meeting.
deliver long term sustainable shareholder value.
17
CalBank
CORPORATE GOVERNANCE STATEMENT (Continued)
In 2018, attendance by Directors at the meetings of the Board and its committees
were as stated below:
Compensation
Board Members Board Audit Risk & Governance
Paarock VanPercy 6/6 4/4 4/4 2/2

Frank B. Adu, Jnr. 6/6 N/A 4/4 2/2
Kobina Quansah 6/6 4/4 4/4 2/2
Malcolmn Pryor 6/6 N/A 4/4 2/2
Helen Nankani 6/6 4/4 4/4 2/2
Philip Owiredu 6/6 N/A N/A N/A
Rosalind Kainyah 6/6 N/A 4/4 N/A
Kofi Osafo-Maafo 6/6 4/4 N/A 2/2
Nana Otuo Acheampong 6/6 4/4 4/4 N/A
James Brenner (resigned 30/6/18) 2/2 N/A 2/2 N/A
Board effectiveness review reflect the Bank’s financial position, results of operation,
The Board conducts an annual self-evaluation to assess plans and long-term commitments. The Committee
itself against its objectives, the aim of the evaluation is provides a formal report to the Board at each meeting of
to assist the Board in improving its effectiveness. The the Board.
evaluation process affords individual Board members the
opportunity to evaluate the Board as a whole as well as During the review period, the Audit Committee considered
their own performance and to make recommendations for and discussed reports on control environment weaknesses,
areas of improvement. their root causes, management responses and remediation
actions.
As outlined in the Board charter and in accordance with
good corporate governance principles, there are in place External Auditor
Audit, Risk Management, Governance and Compensation The Audit Committee exercised oversight over the work
Committees to assist with the execution of the various undertaken by the external auditor, KPMG. During the
responsibilities. year, the Committee met with the audit team including the
partner to enable Committee members gain greater insight
Subsequent to issuance of the Corporate Governance into the challenges faced in the Group’s markets from an
Directive, changes have been made to the composition of external audit perspective.
board committees to ensure compliance with the directive.
The Committee discussed with KPMG the business and
Audit Committee financial risks and have sought assurance that these risks
The Audit Committee which is made up of five (5) non- have been properly addressed in the audit strategy and plan
executive directors and is chaired by Dr. Kobina Quansah that has been reviewed by the Committee. The Committee
and has Mr. Malcolmn Pryor, Ms. Helen Nankani, Mr. Kofi is satisfied that KPMG has allocated sufficient experienced
Osafo Maafo and Nana Otuo Acheampong as members. resources to address identified risks.
The Internal Auditor of the Bank reports directly to the
Audit Committee and sits in all meetings of the Committee. The Committee also scrutinised the audit process, the quality
and experience of the audit partner engaged, and the audit
The Audit Committee provides reasonable assurance that plan which provided details of the number of years KPMG
the Bank is compliant with the relevant laws and regulations, partners and senior team members have been involved in
is conducting its affairs ethically, and is maintaining effective similar audits. KPMG’s lead audit partner for CAL Bank has
control on employee conflict of interest and fraud. The experience in auditing banks and understands the markets
Audit Committee is also responsible for providing assurance in which the Group operates.
that financial disclosures made by management reasonably
18
CalBank
During the review period, the Bank engaged KPMG to approval. During the year the Committee met twice and
support its Basel II/III implementation. discussed the remuneration structure and recommended it
for the Board’s approval.
Risk Management Committee
The Risk Management Committee which is made up The committee is chaired by Ms. Rosalind Kainyah and
of seven (7) non-executive directors and one executive has Dr. Kobina Quansah, Mr. Malcolmn D. Pryor, Mr. Kofi
director is chaired by Ms. Helen Nankani with the following Osafo Maafo, Ms. Helen Nankani and Mr. Frank B. Adu
as members, Dr. Kobina Quansah, Mr. Malcolmn D. Pryor, Jnr. (ex-officio) as members.
Ms. Rosalind Kainyah, Mr. Kofi Osafo Maafo, Nana Otuo
Acheampong and Frank B. Adu Jnr. (ex-officio). Mr. James Remuneration philosophy
Brenner resigned as a member of the Committee upon The Group’s remuneration philosophy aligns with its core
their resignation from the Board. values, including growing our people and delivering value
to our shareholders. The philosophy continues to emphasis
The Committee’s core functions are; the fundamental value of our people and their role in
• monitor the execution of the Board’s risk strategy for ensuring sustainable growth. This approach is crucial in an
different business and geographic markets of operation, environment where skills remain scarce.
• monitor the effectiveness of the risk management The Board of Directors sets the remuneration philosophy
organisational structure, in line with approved business strategy and objectives.
The philosophy aims to maintain an appropriate balance
• advise management on the adoption and implementation between employee and shareholder interests.
of an appropriate risk management policy,
A key success factor for the Bank is its ability to attract,
• keep under review the status and application of risk retain and motivate the talent it requires to achieve its
management responsibilities and accountabilities and, strategic and operational objectives
• review and monitor any requirement for reporting on The following key factors have informed the implementation
risk management to the Board. of reward policies and procedures that support the
achievement of business goals;
Details of the risk management framework is presented in
note 4 of this annual report. • the provision of rewards that enable the attraction,
retention and motivation of employees and the
The committees as part of the governance structure has development of a high-performance culture;
delegated the day-to-day risk management functions to
the Assets and Liability Management Committee (ALMC). • maintaining competitive remuneration in line with our
markets, trends and required statutory obligations;
The ALMC is chaired by the Managing Director with Group
Heads and some Heads of Departments as members. • moving to a cost-to-company remuneration structure;
Its purpose is to recommend policies and guidelines to
the Board for the management of statement of financial • rewarding people according to their performance; and
position growth; deposits, advances and investments; foreign
exchange activities and positions; and risks associated with • educating employees on the full employee value
exchange rates and liquidity. proposition.
Governance and Compensation Committee Remuneration structure

The objectives of the Governance and Compensation Non-executive directors
Committee is to review the appointments and compensation All non-executive directors are provided with a letter of
of the executive and senior management and make appointment setting out the terms of their engagement. A
recommendations to the Board for their consideration and third of the directors are required to retire at each Annual
19
CalBank
General Meeting and may offer themselves for re-election and general staff) are individually rated on the basis of
in accordance with the Companies Act 1963 (Act 179). If performance and potential and this is used to influence
recommended by the directors, the Board then proposes actual performance-related remuneration.
their re-election to shareholders. There is no limitation to
the number of times a non-executive director may stand Long-term incentives
for re-election. It is essential for the Group to retain key skills over the
longer term which is done particularly through employee
Non-executive directors receive fixed fees for service on long service awards. The purpose of these is to align the
the Board’s and Board’s sub-committees, this includes interests of the Bank, its subsidiaries to that of the employees,
a retainer that has been calculated in line with market as well as to attract and retain skilled, competent people.
practices. There are no contractual arrangements for
compensation for loss of office. Non-executive directors do Induction of New Directors and Ongoing Development
not receive short-term incentives, nor do they participate New Directors are provided with a letter of appointment
in any long-term incentive schemes. and participate in a comprehensive induction program
covering the Group’s financial, strategic, operational and
The Board member’s remuneration is reviewed by the risk management overviews. Appointees are provided with
Governance and Compensation Committee and approved an information pack including governance policies and
by the full Board and shareholders. business information, and presentations are made on the
Group’s business functions and activities by key members
Executive directors of the executive and senior management teams.
The executive directors receive a remuneration package
and qualifies for long-term incentives on the same basis During the year a training session was held for the Board
as other employees. The components of their package are on information security awareness and ISO 27001.
as follows:
More broadly, the directors are supported by dedicated
• guaranteed remuneration - based on their market value corporate secretariat resources and have access to
and the role they play; independent professional advice at the Group’s expense
where they judge it necessary to discharge their
• annual performance based bonus used to incentivise responsibilities as directors. Processes are also in place to
the achievement of group objectives; and ensure the timely provision of information to directors.
• pension which provides a competitive post-retirement Sustainability

benefit. The Group’s economic, social and environmental impacts
and responsibilities are effectively entrenched in the Group’s
The remuneration of executive management is reviewed culture through the emphasis placed on the application of
by the Governance and Compensation Committee and the Group’s vision and values in all its operations.
approved by the Board.
CAL Bank believes environmental protection and social
Management development are among the most pressing issues facing
The terms and conditions of employment of the world today. The Bank therefore regards sustainable
managers are guided by the labour laws in Ghana and and social development as a fundamental aspect of
are aligned to best practice. Managerial remuneration is sound business management. Consequently, the Bank is
based on a total cost-to-company structure comprising of committed to continuing the integration of environmental
a fixed cash portion, compulsory benefits including medical and social management into its business activities. The
aid and long service award and optional benefits. Market Bank has therefore put in place an environmental and
data is used to benchmark salary levels and benefits which social management systems (ESMS) and policy which
are reviewed annually. For all employees, performance- are integrated into our credit assessment process. Our
related payments have formed a significant proportion of ESMS policy includes sound objectivities and well defined
total remuneration. All employees (executives, managers processes, procedures and responsibilities to ensure optimal
20
CalBank
benefit from this policy. Bank has granted indemnities to all of its directors on
terms consistent with the applicable statutory provisions.
We continuously improve upon our systems by providing
the needed training to our staff. We also communicate At no time during the year did any director hold a material
with our clients and provide the needed guidelines to interest in any contract of significance with the Bank or
ensure a healthy environment and social development. any of its subsidiary undertakings. The Group is not party
Our benchmarks are the local legislations as well as the to any significant agreements that would automatically
Environmental and Social Policies and Guidelines of the take effect, alter or terminate following a change of control
World Bank Group and the Conventions of the International of the Bank. The Bank has established a robust process
Labour Organisation. requiring directors to disclose proposed outside business
interests before any are entered into. This enables prior
Ethics and Organisational Integrity assessment of any conflict or potential conflict of interest
The Group’s code of ethics is designed to empower and any impact on time commitment. The Board reviews
employees and enable faster decision making at all levels actual or potential conflicts of interest annually.
of our business according to defined ethical principles. It
also aims to ensure that, as a significant organisation in Authorisations are reviewed annually by the Board to
the financial services industry, we adhere to the highest consider if they continue to be appropriate, and also to
standards of responsible business practice. The code revisit the terms upon which they were provided. The
interprets and defines CAL Bank’s values in greater detail Board is satisfied that our processes continue to operate
and provides values-based decision-making principles to effectively.
guide our conduct. It is aligned with other policies and
procedures, and supports the relevant industry regulations Subject to the Companies Act 1963 (Act 179), the regulation
and laws of Ghana. The code of ethics is made available to of the Group and the authority granted to directors in
all staff annually and also published on the Group’ intranet. general meetings, the directors may exercise all the powers
of the Group and may delegate authorities to Committees.
Related Parties Transactions The Company’s regulations contain provisions relating to
The Group has in place policies and procedures to ensure the appointment and removal of directors which is also in
that all related party transactions are carried out at arm’s accordance with the Companies Act 1963 (Act 179) and
length and in accordance with the Banks and Specialised best practices.
Deposit-Taking Institutions Act, 2016 (Act 930). This is
intended to ensure that there is no favourable treatment Subject to the provisions of the Corporate Governance
given to a related party. Directive (2018) the Group does not place a limitation
on the number of board positions any director can hold.
Therefore, in any connected transactions or continuing However, any position taken up by a director would have
connected transactions in the ordinary and usual course of to be disclosed to the Board to ensure there are no conflict
business, and on normal commercial terms with a related of interest issues. Executive directors are required to inform
party or its associate, we ensure all the necessary approvals the Board of any intention to take up any directorship role
are obtained prior to the execution of the transaction. for their consent prior to taking up the formal appointment.
Conflict of Interest Material issues facing the Bank

Directors have a duty not to place themselves in a position There are no material issues facing the Bank.
which gives rise to a real or substantial possibility of conflict
of interest or duty in relation to any matter which is or is
likely to be brought before the Board.
The Bank receives from each of the independent non-

executive directors an annual confirmation of independence
pursuant to the Board code of ethics and still considers
all of the non-executive directors to be independent. The
21
CalBank
INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF CALBANK LIMITED
Report on the Audit of the Consolidated and Separate Financial Statements
Opinion
We have audited the consolidated and separate financial statements of CAL Bank Limited (“the Group and
Bank”), which comprise the statements of financial position as at 31 December 2018 and the statements of
comprehensive income, changes in equity and cash flows for the year the ended and notes to the financial
statements which include a summary of significant accounting policies and other explanatory information, as
set out on pages 26 to 97.
In our opinion, these financial statements give a true and fair view of the consolidated and separate financial
position of CAL Bank Limited as at 31 December 2018, and of its consolidated and separate financial
performance and consolidated and separate cash flows for the year then ended in accordance with International
Financial Reporting Standards (IFRSs) and in the manner required by the Companies Act, 1963 (Act 179), and
the Banks and Specialised Deposit–Taking Institutions Act, 2016 (Act 930).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
and Separate Financial Statements section of our report. We are independent of the Group and Bank in
accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional
Accountants (IESBA Code), together with the ethical requirements that are relevant to our audit of the
financial statements in Ghana and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the consolidated and separate financial statements of the current period. These matters were addressed in
the context of our audit of the consolidated and separate financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Impairment allowance of loans and advances to customers (GH¢174.43.million)
Refer to Note 20 to the consolidated and separate financial statements
The key audit matter How the matter was addressed in our audit
Loans and advances to customers Based on our risk assessment, we have examined the impair-
amounted to GH¢ 2,602.25 million ment charges for loans and advances to customers and provi-
at 31 December 2018 (GH¢ 2,007.77 sions for off-balance sheet exposures and evaluated the meth-
million at 31 December 2017), and the odology applied as well as the assumptions made according to
total impairment allowance account for the description of the key audit matter.
the Bank amounted to GH¢174.43 mil-
lion at 31 December 2018 (GH¢154.10 Our procedures to address the key audit matter included:
million at 31 December 2017).
• Assessing and testing the design, implementation and operat-
The Bank adopted IFRS 9 Finan- ing effectiveness of key controls over the capture, monitoring
cial Instruments (“IFRS 9”) from 1 and reporting of loans and advances to customers;
January 2018, resulting in impairment
charges being recognised when losses
are expected rather than when they
have been incurred. Management has
22
CalBank
INDEPENDENT AUDITOR’S REPORT (Continued)
The key audit matter How the matter was addressed in our audit
disclosed information regarding the Assessing and testing the design and operating effectiveness of
transitional effect of IFRS 9 in note controls over the Bank’s loan impairment process regarding
3.1.3 including the impact on sharehold- management’s review process over impairment calculations;
ers’ equity and profit or loss at 1 January • Evaluating the appropriateness of the accounting policies
2018. based on the requirements of IFRS 9, our business under-
standing and industry practice.
Measurement of loan impairment • Obtaining an understanding of management’s process and
charges for loans and provisions for the controls implemented to ensure the transition adjustments
off-balance sheet exposures is deemed were complete and accurate.
a key audit matter as the determina- • Assessing and substantively validating the impairment models
tion of assumptions for expected credit by re-performing calculations and agreeing sample of data
losses is highly subjective due to the inputs to source documentation. We also assessed whether
level of judgement applied by Manage- the data used in the models is complete and accurate through
ment. testing a sample of relevant data fields and their aggregate
amounts against data in the source system.
The most significant judgements are: • Testing key controls over assumptions used in the expected
• Assumptions used in the expected credit loss models to assess the credit risk related to the ex-
credit loss models to assess the posure and the expected future cash flows of the customer.
credit risk related to the exposure • Obtaining and substantively testing evidence to support the
and the expected future cash flows assumptions used in the expected credit loss models applied
of the customer. in stage allocation, assumptions applied to derive lifetime
• Timely identification of exposures possibility of default and methods applied to derive loss given
with significant increase in credit risk default.
and credit impaired exposures. • Obtaining and substantively testing evidence of timely identifi-
• Valuation of collateral and assump- cation of exposures with significant increase in credit risk and
tions of future cash flows on manu- timely identification of credit impaired exposures.
ally assessed credit-impaired expo- • Obtaining and substantively testing evidence to support ap-
sures. propriate determination of assumptions for loan impairment
• Management overlays for particular charges and provisions for guarantees including valuation of
high-risk portfolios, which are not collateral and assumptions of future cash flows on manually
appropriately captured in the expect- assessed credit impaired exposures.
ed credit loss model. • Obtaining and substantively testing evidence of Management
overlays for high-risk portfolios with particular focus on the
Management has provided further
methodology applied, evidence of assumptions-setting
information about the loan impairment
processes and the consistency
charges and provisions for off-balance
sheet exposures in notes 20 to the
financial statements.
Other Information
The Directors are responsible for the other information. The other information comprises the Report of the
Directors as required by the Companies Act, 1963 (Act 179), and the Banks and Specialised Deposit–Taking
Institutions Act, 2016 (Act 930), the Corporate Governance Statement, the Chairman’s Statement and the
Managing Director’s Report. Other information does not include the consolidated and separate financial
statements and our auditor’s report thereon.
Our opinion on the consolidated and separate financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon. In connection with our audit of the
consolidated and separate financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the consolidated and separate
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
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Responsibilities of the Directors for the Consolidated and Separate Financial Statements
The Directors are responsible for the preparation of consolidated and separate financial statements that give a
true and fair view in accordance with International Financial Reporting Standards and in the manner required
by the Companies Act, 1963 (Act 179) and the Banks and Specialised Deposit–Taking Institutions Act, 2016
(Act 930), and for such internal control as the Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whet her due to fraud or error.
In preparing the consolidated and separate financial statements, the Directors are responsible for assessing
the Group and Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either in tend to liquidate the
Group and/or Bank or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for overseeing the Group’s and Bank’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial
statements as a whole are free from material misstatement , whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated and separate financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated and separate financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Group and Bank’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group and the Bank’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the consolidated and separate financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the Group and/or Bank to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated and separate financial
statements, including the disclosures, and whether the consolidated and separate financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our
audit opinion.
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We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
Report on Other Legal and Regulatory Requirements
Compliance with the requirements of Section 133 of the Companies Act, 1963 (Act 179) and Section 85 of
the Banks and Specialised Deposit- Taking Institutions Act, 2016 (Act 930)
We have obtained all the information and explanations which, to the best of our knowledge and belief were
necessary for the purpose of our audit.
In our opinion, proper books of account have been kept, and the consolidated and separate statements of
financial position and comprehensive income are in agreement with the books of account.
The Bank’s transactions were within its powers and the Bank generally complied with the relevant provisions
of the Banks and Specialised Deposit- Taking Institutions Act, 2016 (Act 930).
The Bank has generally complied with the provisions of the Anti-Money Laundering Act, 2008 (Act 749), as
amended by Anti-Money Laundering Amendments Act, 2014 (Act 874), the Anti-Terrorism Act, 2008 (Act
762) and the Regulations made under these enactments.
The engagement partner on the audit resulting in this independent auditor’s report is Frederick Nyan Dennis
(ICAG/P/1426).
……………………………………........................................................…….
FOR AND ON BEHALF OF:
KPMG: (ICAG/F/2019/038)
CHARTERED ACCOUNTANTS
13 YIYIWA DRIVE, ABELENKPE
P O BOX GP 242
ACCRA
27 February 2019
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STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER
in thousands of Ghana Cedis 2018 2017
Notes Bank Group Bank Group

Interest Income calculated using the effective
interest method 9 772,751 773,270 668,055 668,128
Interest Expense 9 (356,762) (351,641) (322,818) (317,096)


Fee and Commission Income 10 68,382 75,988 63,818 72,985
Fee and Commission Expense 10 (6,445) (6,445) (4,887) (4,922)
Net Fee and Commission 61,937 69,543 58,931 68,063

Trading Income 11 26,918 27,106 40,671 40,671
Other Operating Income 12 15,655 979 1,470 2,466
42,573 28,085 42,141 43,137

Operating Income 520,499 519,257 446,309 462,232

Impairment Loss on Financial instruments 20 (66,735) (66,735) (54,947) (54,947)
Personnel Expenses 13 (122,308) (125,364) (100,255) (103,021)
Depreciation and Amortisation 25, 26 (11,674) (11,714) (8,300) (8,332)
Other Expenses 14 (89,429) (92,538) (74,470) (77,069)
Total Operating Expenses (290,146) (296,351) (237,972) (243,369)

Profit Before Income Tax 230,353 222,906 208,337 218,863

Income Tax Expense 15 (67,413) (69,690) (63,171) (65,965)
Profit For The Year 162,940 153,216 145,166 152,898

Other Comprehensive Income, Net of Income Tax

Items that may be reclassified subsequently
to profit or loss:
Movement in Fair value reserve (9,013) (9,013) 36 36

Items that will not be reclassified subsequently to profit or loss:
Deferred Tax on revaluation reserve (1,280) (1,280) 113 113

Remeasurement of defined benefit liability (462) (442) (656) (640)
Other comprehensive loss for the year (10,755) (10,735) (507) (491)

Total Comprehensive Income for the year 152,185 142,481 144,659 152,407

Earnings per share (Ghana Cedis per share) 16
- Basic 0.2600 0.2449 0.2648 0.2793
- Diluted 0.2600 0.2449 0.2648 0.2793
The notes on pages 31 to 97 are an intergral part of these consolidated financial statements.
26
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STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER

2018 2017
Assets
Cash and Cash Equivalents 18 637,565 637,570 512,376 512,376
Invesment Securities 19 1,799,439 1,815,912 1,479,153 1,486,965
Loans and Advances to Customers 20 2,428,002 2,422,952 1,853,674 1,853,674
Investments in Subsidiaries 21 2,038 - 2,038 -
Current Tax Assets 23 - 512 - 600
Property and Equipment 25 435,493 435,583 278,730 278,810
Intangible Assets 26 19,901 20,632 17,922 17,922
Deferred Tax Assets 24 14,891 15,075 17,706 17,706
Other Assets 22 68,527 71,063 51,039 55,085
Total Assets 5,405,856 5,419,299 4,212,638 4,223,138

Liabilities
Deposits From Banks and Other Financial Institutions 28 78,161 71,371 84,913 69,422
Deposits From Customers 27 3,078,682 3,078,682 2,428,201 2,428,201
Borrowings 29 1,319,932 1,319,932 931,816 931,816
Current Tax Liabilities 23 7,273 7,301 1,836 1,836
Deferred Tax Liabilities 24 - - - 8
Other Liabilities 30 157,236 162,568 118,445 119,785
Total Liabilities 4,641,284 4,639,854 3,565,211 3,551,068

Equity
Stated Capital 31a 400,000 400,000 100,000 100,000
Income Surplus 58,140 73,666 275,883 301,133
Revaluation Reserve 31c 62,246 62,246 63,526 63,526
Statutory Reserve 31b 244,782 244,782 163,312 163,312
Credit Risk Reserve 31d 16,042 16,042 51,869 51,869
Other Reserves 31e (16,638) (17,291) (7,163) (7,770)
Total Shareholders’ Equity 764,572 779,445 647,427 672,070

Total Liabilities and Shareholders’ Equity 5,405,856 5,419,299 4,212,638 4,223,138

Net Assets Value per Share (Ghana Cedis per Share) 1.2202 1.2440 1.1809 1.2258
(Net Assets Value per Share is defined as net assets divided by number of shares)

Frank B. Adu Jnr. Paarock A. Vanpercy
Director Director
The Directors approved the financial statements on 27 February 2019
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STATEMENTS OF CHANGES IN EQUITY

2018 Other Reserves
Regulatory
Stated Statutory Revaluation Income Treasury Fair Value Total
The Bank Credit Risk
Capital Reserve Reserve Surplus Shares Reserves Equity
Reserve
Balance at 1 January 100,000 163,312 63,526 275,883 - (7,163) 51,869 647,427
IFRS 9 Impact - - - (17,086) - - - (17,086)
Transfer from regulatory credit risk reserve - - - 17,086 - - (17,086) -
Restated balance as at 1 January 100,000 163,312 63,526 275,883 - (7,163) 34,783 630,341
Total comprehensive income
Profit - - - 162,940 - - - 162,940
Other comprehensive income
Net change in revaluation surplus - - (1,280) - - - - (1,280)
FVOCI financial assets - - - - - (9,013) - (9,013)
Remeasurement of defined benefit liability - - - - - (462) - (462)
Transactions with shareholders
Bonus Issue 78,320 - - (78,320) - - - -
Transfer to stated capital 221,680 - - (221,680) - - - -
Dividend tax on Capital Increase - - - (17,954) - - - (17,954)
Transfer to/from reserves
Statutory reserve - 81,470 - (81,470) - - - -
Regulatory credit risk reserve - - - 18,741 - - (18,741) -
Balance at 31 December 400,000 244,782 62,246 58,140 - (16,638) 16,042 764,572
Other Reserves
Regulatory
The Group Credit Risk
Reserve
Balance at 1 January 100,000 163,312 63,526 301,133 (518) (7,252) 51,869 672,070
IFRS 9 Impact - - - (17,086) - - - (17,086)
Transfer from regulatory credit risk reserve - - - 17,086 - - (17,086) -
Restated balance as at 1 January 100,000 163,312 63,526 301,133 (518) (7,252) 34,783 654,984
Profit - - - 153,216 - - - 153,216
Net change in revaluation surplus - - (1,280) - - - - (1,280)
FVOCI financial assets - - - - - (9,013) - (9,013)
Bonus Issue 78,320 - - (78,320) - - - -
Transfer to stated capital 221,680 - - (221,680) - - - -
Dividend tax on Capital Increase - - - (17,954) - - - (17,954)
Dividend paid - - - - - - - -
Net Changes in Bank’s shares held by subsidiary - - - - (66) - - (66)
Balance at 31 December 400,000 244,782 62,246 73,666 (584) (16,707) 16,042 779,445
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2017 Other Reserves
Regulatory
The Bank Credit Risk
Reserve
Balance at 1 January 100,000 145,166 63,413 144,946 - (6,543) 55,786 502,768

Profit - - - 145,166 - - - 145,166

Net change in revaluation surplus - - 113 - - - - 113
Available-for-sale financial assets - - - - - 36 - 36


Balance at 31 December 100,000 163,312 63,526 275,883 - (7,163) 51,869 647,427
Other Reserves
Regulatory
The Group Credit Risk
Reserve
Balance at 1 January 100,000 145,166 63,413 162,464 (678) (6,648) 55,786 519,503

Profit - - - 152,898 - - - 152,898

Net change in revaluation surplus - - 113 - - - - 113
Available-for-sale financial assets - - - - - 36 36
Remeasurement of defined benefit liability - - - - - (640) (640)

Net Changes in Bank’s shares held by subsidiary - - - - 160 - - 160

Regulatory credit risk reserve 3,917 (3,917) -
Balance at 31 December 100,000 163,312 63,526 301,133 (518) (7,252) 51,869 672,070
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STATEMENTS OF CASH FLOWS

in thousands of Ghana Cedis 2018 2017
Cash Flow From Operating Activities
Profit for the Year 162,940 153,216 145,166 152,898

Adjustments for:
Depreciation and Amortisation 25,26 11,674 11,714 8,300 8,332
Impairment on Financial Assets 20 66,735 66,735 54,947 54,947
Net Interest Income 9 (415,989) (421,629) (345,237) (351,032)
Income Tax Expense 15 67,413 69,690 63,171 65,965
Gain on Disposal of Property and Equipment (203) (203) - -
(107,430) (120,477) (73,653) (68,890)

Change in Loans and Advances to Customers (574,328) (569,278) 112,720 112,720
Change in Other Assets (17,488) (15,978) 40,981 40,220
Change in Deposits From Banks and Other Financial Institutions (6,752) 1,949 21,537 6,619
Change in Customer Deposits 650,481 650,481 115,810 115,811
Change in Other Liabilities 38,791 42,783 (29,565) (30,761)

Interest and Dividends Received 651,119 637,922 643,840 643,962
Interest Paid (366,471) (347,812) (250,181) (244,459)
Income Tax Paid (60,441) (62,794) (29,048) (32,693)
Net Cash Flow From Operating Activities 207,481 216,796 552,441 542,529

Cash Flows From Investing Activities
Purchase of Investment Securities (320,286) (328,820) (678,726) (668,806)
Purchase of Property and Equipment 25 (149,662) (149,707) (33,480) (33,488)
Proceeds From Sale of Property and Equipment 222 222 - -
Purchase of Intangible Assets 26 (682) (1,413) (11,631) (11,631)
Net Cash Used in Investing Activities (470,408) (479,718) (723,837) (713,925)

Cash Flows from Financing Activities
Proceeds from Borrowings 844,437 844,437 694,383 694,383
Repayment of Borrowings (456,321) (456,321) (439,367) (439,367)
Net Cash Flow from Financing Activities 388,116 388,116 255,016 255,016

Net Increase in Cash and Cash Equivalents 125,189 125,194 83,620 83,620
Cash and Cash Equivalents at 1 January 512,376 512,376 428,756 428,756

Cash and Cash Equivalents at 31 December 637,565 637,570 512,376 512,376
30
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NOTES TO THE FINANCIAL STATEMENTS
FOR
THE YEAR ENDED 31 DECEMBER 2018
(All currency amounts in the notes are in thousands of Ghana Cedis unless otherwise stated)
1. REPORTING ENTITY
2.4 Use of estimates and judgement
Cal Bank Limited (The “Bank”) is a Bank incorporated in The preparation of financial statements in conformity with
Ghana. The address and registered office of the Bank IFRS requires management to make judgment, estimates
can be found on page 3 of the annual report. The Bank and assumptions that affect the application of policies and
operates with a Universal Banking license that allows reported amounts of assets, liabilities, income and expenses.
it to undertake Banking and related activities. These
consolidated financial statements as at and for the year The estimates and associated assumptions are based on
ended 31 December 2018 comprise the Bank and its historical experience and various other factors that are
subsidiaries, (together referred to as the ‘Group’). The believed to be reasonable under the circumstances, the
separate financial statements as at and for the year ended results of which form the basis of making the judgement
31 December 2018 comprise the financial statements of about carrying values of assets and liabilities that are not
the Bank. For Companies Act, 1963 (Act 179) reporting readily apparent from other sources. Actual results may
purposes, the statement of financial position is represented differ from these estimates.
by the statement of financial position and the statement of
comprehensive income account by part of the statement The estimates and underlying assumptions are reviewed on
of comprehensive income, in these financial statements. an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if
The Bank is listed on the Ghana Stock Exchange (GSE). the revision affects only that period or in the period of the
revision and future periods if the revision affects both current
and future periods. In particular, information about significant
2. BASIS OF PREPARATION areas of estimation uncertainty and critical judgements in
applying accounting policies that have the most significant
2.1 Statement of compliance effect on amounts recognised in the financial statements are
The consolidated and separate financial statements have described in note 4.
been prepared in accordance with International Financial
Reporting Standards (IFRS) and its interpretations issued 2.5 Information about significant estimation,
by the International Accounting Standards Board (IASB) uncertainty and critical judgements
and in the manner required by the Companies Act 1963, Accounting policies that have the most significant effect
(Act 179), and the Banks and Specialised Deposit-Taking on the amounts recognised in the financial statement are
Institutions Act, 2016 (Act 930). described in note 4.
2.2 Basis of measurement 2.6 Presentation of financial statements

The financial statements are prepared on the historical cost The Bank presents its statement of financial position in order
basis except for the following assets and liabilities that are of liquidity. An analysis regarding recovery or settlement
stated at their fair value: financial instruments at fair value within 12 months after the reporting date (current) and
through profit or loss and financial instruments classified as more than 12 months after the reporting date (non–current)
fair value through other comprehensive income (FVOCI) is presented in note 5.3.
and leasehold land and buildings.
Financial assets and financial liabilities are offset and the
2.3 Functional and presentation currency net amount reported in the statement of financial position
only when there is a legally enforceable right to offset the
The financial statements are presented in Ghana Cedis, recognised amounts and there is an intention to settle on
which is the Bank’s functional currency. Except otherwise a net basis, or to realise the assets and settle the liability
indicated, financial information presented in Ghana Cedis simultaneously. Income and expenses are not offset in the
have been rounded to the nearest thousand. statements of comprehensive income unless required or
permitted by any accounting standard or interpretation, and
as specifically disclosed in the accounting policies of the Bank.
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NOTES TO THE FINANCIAL STATEMENTS (Continued)
3. CHANGES IN ACCOUNTING POLICIES method. Previously, the Group disclosed this amount in the
The Group has initially adopted IFRS 9 (see 3.1) and IFRS notes to the financial statements.
15 (see 3.2) from 1 January 2018.
Additionally, the Group has adopted consequential
A number of other new standards are also effective from amendments to IFRS 7 Financial Instruments: Disclosures
1 January 2018 but they do not have a material effect on that are applied to disclosures about 2018, but have not
the Group’s financial statements. been applied to the comparative information.
Due to the transition method chosen by the Group in The key changes to the Group’s accounting policies resulting
applying IFRS 9, comparative information throughout from its adoption of IFRS 9 are summarised below. The
these financial statements has not generally been restated full impact of adopting the standard is set out in Note 3.1.3.
to reflect its requirements.
3.1.1. Classification of financial assets and financial
The adoption of IFRS 15 did not impact the timing or liabilities
amount of fee and commission income from contracts with IFRS 9 contains three principal classification categories
customers and the related assets and liabilities recognised for financial assets: measured at amortised cost, fair value
by the Group. Accordingly, the impact on the comparative through other comprehensive income (FVOCI) and fair
information is limited to new disclosure requirements. value through profit or loss (FVTPL). IFRS 9 classification
is generally based on the business model in which a
The effect of initially applying these standards is mainly financial asset is managed and its contractual cash flows.
attributed to the following: The standard eliminates the previous IAS 39 categories
of held-to-maturity, loans and receivables and available-
– an increase in impairment losses recognised on financial for-sale. Under IFRS 9, derivatives embedded in contracts
assets (see Note 3.1.3); where the host is a financial asset in the scope of the
standard are never bifurcated. Instead, the whole hybrid
– additional disclosures related to IFRS 9. instrument is assessed for classification. For an explanation
– additional disclosures related to IFRS 15. of how the Group classifies financial assets under IFRS 9,
see Note 4.9.4.
Except for the changes below, the Group has consistently
applied the accounting policies as set out in Note 4 to IFRS 9 largely retains the existing requirements in IAS 39
all periods presented in these consolidated and separate for the classification of financial liabilities.
financial statements. For an explanation of how the Group classifies financial
liabilities under IFRS 9, see Note 4.9.4.
3.1. IFRS 9 Financial Instruments
IFRS 9 sets out requirements for recognising and 3.1.2. Impairment of financial assets
measuring financial assets, financial liabilities and some IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an
contracts to buy or sell non-financial items. This standard ‘expected credit loss’ model. The new impairment model
replaces IAS 39 Financial Instruments: Recognition and also applies to certain loan commitments and financial
Measurement. The requirements of IFRS 9 represent a guarantee contracts but not to equity investments.
significant change from IAS 39. The new standard brings
fundamental changes to the accounting for financial assets Under IFRS 9, credit losses are recognised earlier than
and to certain aspects of the accounting for financial under IAS 39. For an explanation of how the Group applies
liabilities. the impairment requirements of IFRS 9, see Note 4.12.
As a result of the adoption of IFRS 9, the Group has 3.1.3. Transition

adopted consequential amendments to IAS 1 Presentation Changes in accounting policies resulting from the adoption
of Financial Statements, which require separate of IFRS 9 have been applied retrospectively, except as
presentation in the statement of comprehensive income described below.
of interest revenue calculated using the effective interest
32
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– Comparative periods generally have not been restated. - The determination of the business model within which a
Differences in the carrying amounts of financial assets financial asset is held.
resulting from the adoption of IFRS 9 are recognised
- The designation of certain investments in equity
in retained earnings and reserves as at 1 January 2018.
instruments not held for trading as at FVOCI.
Accordingly, the information presented for 2017 does not
reflect the requirements of IFRS 9 and therefore is not
- If a debt security had low credit risk at the date of initial
comparable to the information presented for 2018 under
application of IFRS 9, then the Group has assumed that
IFRS 9.
credit risk on the asset had not increased significantly
since its initial recognition.
The Group used the exemption not to restate comparative
periods but considering that the amendments made by
3.2. IFRS 15 Revenue from Contracts with Customers
IFRS 9 to IAS 1 introduced the requirement to present
IFRS 15 establishes a comprehensive framework for
‘interest income calculated using the effective interest rate’
determining whether, how much and when revenue is
as a separate line item in the statement of comprehensive
recognised. It replaced IAS 18 Revenue, IAS 11 Construction
income, the Group has reclassified comparative interest
Contracts and related interpretations.
income on finance leases to ‘other interest income’ and
changed the description of the line item from ‘interest
The Group initially applied IFRS 15 on 1 January 2018
income’ reported in 2017 to ‘interest income calculated
retrospectively in accordance with IAS 8. The timing or
using the effective interest method’.
amount of the Group’s fee and commission income from
contracts with customers was not impacted by the adoption
The following assessments have been made on the basis
of IFRS 15.
of the facts and circumstances that existed at the date of
initial application:
The measurement category and the carrying amount of financial assets and liabilities of the
Bank in accordance with IAS 39 and IFRS 9 at 1 January 2018 are compared as follows:

IAS 39 IFRS 9
Bank Measurement Carrying Measurement Carrying
category amount category amount
Financial assets
Cash and cash equivalents Amortised cost
(Loans and receivables) 512,376 Amortised cost 512,376
Investment securities FVOCI, Amortised cost
(Available for sale) 1,479,153 FVOCI 1,479,153
Loans and advances to customers Amortised cost
(Loans and receivables) 1,853,674 Amortised cost 1,837,794
Other assets Amortised cost
Financial Liabilities
Deposits from financial institutions Amortised cost 84,913 Amortised cost 84,913
Deposits from customers Amortised cost 2,428,201 Amortised cost 2,428,201
Borrowings Amortised cost 931,816 Amortised cost 931,816
Other Liabilities Amortised cost 118,445 Amortised cost 119,651
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IAS 39 IFRS 9
Group Measurement Carrying Measurement Carrying
category amount category amount
Financial assets
Cash and cash equivalents Amortised cost
Investment securities FVOCI, FVTPL,
Amortised cost
(Available for sale) 1,486,965 FVOCI 1,486,965
Loans and advances to customers Amortised cost
(Loans and receivables) 1,853,674 Amortised cost 1,837,794
Other assets Amortised cost
Financial Liabilities
Deposits from financial institutions Amortised cost 69,422 Amortised cost 69,422
Deposits from customers Amortised cost 2,428,201 Amortised cost 2,428,201
Borrowings Amortised cost 931,816 Amortised cost 931,816
Other Liabilities Amortised cost 119,785 Amortised cost 120,991
A reconciliation of statement of financial position financial of assets and liabilities balances from IAS 39 to IFRS 9 at 01
January 2018 is as follows;
IAS 39 Carrying IFRS 9 Carrying

Reclassifications Remeasurements
Bank amount amount
31-Dec-17 1-Jan-18
Cash and cash equivalents –
Amortised Cost
Closing balance under IAS 39 512,376 - - -
Opening balance under IFRS 9 - - - 512,376
Investment securities - FVTPL

Closing balance under IAS 39 1,262,211 - - -
Opening balance under IFRS 9 - - - 1,262,211
Investment securities - FVOCI

Loans and advances to customers –

Amortised Cost
Remeasurement: ECL allowance - - (15,880) -
Other assets - Amortised Cost

Total financial assets 3,896,242 - (15,880) 3,880,362
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Bank amount amount
31-Dec-17 1-Jan-18
Deposits from financial institutions
Deposits from customers

Borrowings
Other Liabilities
Remeasurement: ECL allowance - - 1,206 -
Total financial liabilities 3,563,375 - 1,206 3,564,581

Group amount amount
31-Dec-17 1-Jan-18
Cash and cash equivalents –
Amortised Cost
Investment securities - FVTPL

Investment securities - FVOCI

Loans and advances to customers –

Amortised Cost
Remeasurement: ECL allowance - - (15,880) -
Other assets - Amortised Cost

Opening balance under IFRS 9 - - 55,085
Total financial assets 3,908,100 - (15,880) 3,892,220
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Group amount amount
31-Dec-17 1-Jan-18
Deposits from financial institutions
Deposits from customers

Borrowings
Other Liabilities
Remeasurement: ECL allowance - - 1,206 -
Total financial liabilities 3,549,224 - 1,206 3,550,430
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4.0. SIGNIFICANT ACCOUNTING

POLICIES Profit or loss and each component of other comprehensive
The accounting policies set out below have been applied income (OCI) are attributed to the equity holders of the
consistently to all periods presented in these financial parent of the Group and to the non-controlling interests,
statements, and have been applied consistently by Group even if this results in the non-controlling interests having
entities. a deficit balance. When necessary, adjustments are made
to the financial statements of subsidiaries to bring their
4.1. Basis of Consolidation accounting policies in line with the Group’s accounting
policies. All intra-group assets and liabilities, equity,
4.1.1. Subsidiaries income, expenses and cash flows relating to transactions
The consolidated financial statements comprise the between members of the Group are eliminated in full on
financial statements of the Group and its subsidiaries consolidation. The financial statements of the subsidiaries
as at 31 December 2018. Control is achieved when the used to prepare the consolidated financial statements were
Group is exposed, or has rights, to variable returns from prepared as of the Bank’s reporting date.
its involvement with the investee and has the ability to
affect those returns through its power over the investee. In the separate financial statements, investments in
Specifically, the Group controls an investee if, and only if, subsidiaries are accounted for at cost less impairment.
the Group has: Cost also includes direct attributable costs of investment.

4.1.2. Funds Management
• Power over the investee (i.e., existing rights that give The Group manages and administers assets held in unit
it the current ability to direct the relevant activities of trust or other investment vehicles on behalf of investors.
the investee) The financial statements of these entities are not included
• Exposure, or rights, to variable returns from its in these consolidated and separate financial statements.
involvement with the investee Information about the group’s fund management activities
• The ability to use its power over the investee to affect are set out in note 32.
its returns
4.2. Foreign Currency
Generally, there is a presumption that a majority of voting Foreign currency transactions and end of day balances are
rights result in control. To support this presumption and translated into the functional currency using the published
when the Group has less than a majority of the voting average inter-bank exchange rates by the Bank of
or similar rights of an investee, the Group considers all Ghana prevailing at the dates of the transactions. Foreign
relevant facts and circumstances in assessing whether it exchange gains and losses resulting from the settlement
has power over an investee, including: of such transactions, and from the translation at year-
• The contractual arrangement with the other vote end exchange rates of monetary assets and liabilities
holders of the investee denominated in foreign currencies, are recognised in the
• Rights arising from other contractual arrangements statement of comprehensive income. Non-monetary assets
• The Group’s voting rights and potential voting rights and liabilities that are measured at fair value in a foreign
currency are translated into the functional currency at the
The Group re-assesses whether or not it controls an spot exchange rate at the date on which the fair value is
investee if facts and circumstances indicate that there are determined. Non-monetary items that are measured based
changes to one or more of the three elements of control. on historical cost in foreign currency are translated using
Consolidation of a subsidiary begins when the Group spot rate at the date of translation.
obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary. Assets, liabilities, 4.3. Recognition of interest income
income and expenses of a subsidiary acquired or disposed
off during the year are included in the consolidated financial 4.3.1. The effective interest rate method
statements from the date the Group gains control until the Under both IFRS 9 and IAS 39, interest income is
date the Group ceases to control the subsidiary. recorded using the effective interest rate (EIR) method
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for all financial instruments measured at amortised cost, mandatorily required to be measured at FVPL is recognised
financial instruments designated at FVPL. Interest income using the contractual interest rate in net trading income.
on interest bearing financial assets measured at FVOCI
under IFRS 9, similarly to interest bearing financial assets 4.4. Fees and commissions
classified as available-for-sale or held to maturity under Fees and commission income and expenses that are an
IAS 39 are also recorded by using the EIR method. The integral part of the effective interest rate on financial
EIR is the rate that exactly discounts estimated future instruments are included in the measurement of the
cash receipts through the expected life of the financial effective interest rate.
instrument or, when appropriate, a shorter period, to the
net carrying amount of the financial asset. Other fees and commission income, including account
servicing fees, investment management fees, sales
The EIR (and therefore, the amortised cost of the asset) is commission, placement and arrangement fees and
calculated by taking into account any discount or premium syndication fees are recognised as the related services are
on acquisition, fees and costs that are an integral part performed.
of the EIR. Hence, it recognises the effect of potentially
different interest rates charged at various stages, and Other fees and commission expense relates mainly to
other characteristics of the product life cycle (including transaction and service fees, which are expensed as the
prepayments, penalty interest and charges). services are received.
If expectations regarding the cash flows on the financial 4.5. Trading Income
asset are revised for reasons other than credit risk, the Income arises from the margins which are achieved through
adjustment is booked as a positive or negative adjustment market-making and customer business and from changes
to the carrying amount of the asset in the statement of in market value caused by movements in interest and
financial position with an increase or reduction in interest exchange rates, equity prices and other market variables.
income. The adjustment is subsequently amortised Trading positions are held at fair value and the resulting
through Interest and similar income in the statement of gains and losses are included in profit or loss, together with
comprehensive income. interest and dividends arising from long and short positions
and funding costs relating to trading activities.
4.3.2. Interest and similar income
The Bank calculates interest income by applying the EIR 4.6. Dividends
to the gross carrying amount of financial assets other than Dividend income is recognised when the right to receive
credit-impaired assets. income is established. Usually this is the ex-dividend date
for equity securities. Dividends are reflected as a component
When a financial asset becomes credit-impaired and of other operating income. Dividend payable is recognised
is, therefore, regarded as ‘Stage 3’, the Bank calculates as a liability in the period in which they are declared.
interest income by applying the effective interest rate to
the net amortised cost of the financial asset. If the financial 4.7. Other Operating Income
assets cures and is no longer credit-impaired, the Bank Other operating income comprises other income including
reverts to calculating interest income on a gross basis. gains or losses arising on fair value changes in trading
assets and liabilities.
For purchased or originated credit-impaired (POCI)
financial assets the Bank calculates interest income by 4.8. Income tax expense
calculating the credit-adjusted EIR and applying that rate Income tax expense comprises current and deferred tax.
to the amortised cost of the asset. The credit-adjusted EIR Income tax expense is recognised in profit or loss except
is the interest rate that, at original recognition, discounts to the extent that it relates to items recognised directly in
the estimated future cash flows (including credit losses) to other comprehensive income (OCI) or equity, in which case
the amortised cost of the POCI assets. it is recognised in OCI or equity.
Interest income on all trading assets and financial assets
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4.8.1 Current Taxation reverse in the foreseeable future.

Current tax is the expected tax payable on the taxable
income for the year, using tax rates enacted or substantively 4.8.3. Levies and similar charges
enacted at the statement of financial position date, and any The Group recognises the liability arising from levies and
adjustment to tax payable in respect of previous years. The similar charges when it becomes legally enforceable.
Group provides for income taxes at the current tax rates
on the taxable profits of the Group. 4.9. Financial Assets and Liabilities
4.8.2. Deferred Taxation 4.9.1. Date of recognition

Deferred tax is recognised in respect of temporary Financial assets and liabilities, with the exception of loans
differences between the carrying amounts of assets and advances to customers and balances due to customers,
and liabilities for financial reporting purposes and the are initially recognised on the trade date, i.e., the date that
corresponding amounts used for taxation purposes. the Bank becomes a party to the contractual provisions of
However, deferred income tax is not accounted for if the instrument. This includes regular way trades: purchases
it arises from initial recognition of an asset or liability in or sales of financial assets that require delivery of assets
a transaction other than a business combination that at within the time frame generally established by regulation
the time of the transaction affects neither accounting nor or convention in the market place. Loans and advances to
taxable profit or loss. customers are recognised when funds are transferred to
the customers’ accounts. The Bank recognises balances
Deferred tax is measured at tax rates that are expected due to customers when funds are transferred to the Bank.
to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the 4.9.2. Initial measurement of financial instruments
reporting date. A deferred tax asset is recognised only Financial asset or liability is measured initially at fair value
to the extent that it is probable that future taxable profits plus, for an item not at FVTPL, transaction costs that are
will be available against which the asset can be utilised. directly attributable to its acquisition or issue. When the fair
Deferred tax assets are reviewed at each reporting date value of financial instruments at initial recognition differs
and are reduced to the extent that it is no longer probable from the transaction price, the Bank accounts for the Day
that the related tax benefit will be realised. 1 profit or loss, as described below.
Deferred tax assets and liabilities are offset if there is a 4.9.3. Day 1 profit or loss
legally enforceable right to offset current tax liabilities and When the transaction price of the instrument differs from
assets, and they relate to taxes levied by the same tax the fair value at origination and the fair value is based
authority on the same taxable entity, or on different tax on a valuation technique using only inputs observable in
entities, but they intend to settle current tax liabilities and market transactions, the Bank recognises the difference
assets on a net basis or the tax assets and liabilities will be between the transaction price and fair value in net trading
realised simultaneously. income. In those cases where fair value is based on models
for which some of the inputs are not observable, the
Deferred tax is provided using the statement of financial difference between the transaction price and the fair value
position method, providing for temporary differences is deferred and is only recognised in profit or loss when
between the carrying amounts of assets and liabilities for the inputs become observable, or when the instrument is
financial reporting purposes and the amounts used for derecognised.
taxation purposes.
4.9.4. Classification and Measurement categories of
Deferred tax is not recognised for the following temporary financial assets and liabilities
differences: the initial recognition of goodwill, the initial From 1 January 2018, the Bank has classified all of its
recognition of assets or liabilities in a transaction that is not financial assets based on the business model for managing
a business combination and that affects neither accounting the assets and the asset’s contractual terms, measured at
nor taxable profit, and differences relating to investments either:
in subsidiaries to the extent that they probably will not
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• Amortised cost.
• Fair value through other comprehensive income(FVOCI). The Bank’s business model is not assessed on an
• FVPL instrument-by-instrument basis, but at a higher level of
aggregated portfolios and is based on observable factors
The Bank may designate financial instruments at FVPL, if such as:
so doing eliminates or significantly reduces measurement
or recognition inconsistencies, as explained in note 4.9.9. • How the performance of the business model and the
financial assets held within that business model are
Before 1 January 2018, the Bank classified its financial evaluated and reported to the entity’s key management
assets as loans and receivables (amortised cost), FVPL, personnel
available-for-sale or held-to-maturity (amortised cost). • The risks that affect the performance of the business
model (and the financial assets held within that business
Financial liabilities, other than loan commitments and model) and; in particular, the way those risks are
financial guarantees, are measured at amortised cost or managed
at FVPL when they are held for trading and derivative • How managers of the business are compensated (for
instruments or the fair value designation is applied, as example, whether the compensation is based on the
explained in note 4.9.10. fair value of the assets managed or on the contractual
cash flows collected)
4.9.5. Loans and advances to customers, Financial • The expected frequency, value and timing of sales are
investments at amortised cost also important aspects of the Bank’s assessment
Before 1 January 2018, Loans and advances to customers,
included non–derivative financial assets with fixed or The business model assessment is based on reasonably
determinable payments that were not quoted in an active expected scenarios without taking ‘worst case’ or ‘stress
market, other than those: case’ scenarios into account. If cash flows after initial
• That the Bank intended to sell immediately or in the recognition are realised in a way that is different from the
near term Bank’s original expectations, the Bank does not change the
• That the Bank, upon initial recognition, designated as at classification of the remaining financial assets held in that
FVPL or as available-for-sale business model, but incorporates such information when
• For which the Bank may not recover substantially all assessing newly originated or newly purchased financial
of its initial investment, other than because of credit assets going forward.
deterioration, which were designated as available-for-
sale. 4.9.5.2. The SPPI test
As a second step of its classification process the Bank
From 1 January 2018, the Bank only measures Due assesses the contractual terms of financial instrument to
from banks, Loans and advances to customers and other identify whether they meet the SPPI test.
financial investments at amortised cost if both of the
following conditions are met: ‘Principal’ for the purpose of this test is defined as the fair
• The financial asset is held within a business model with value of the financial asset at initial recognition and may
the objective to hold financial assets in order to collect change over the life of the financial asset (for example, if
contractual cash flows there are repayments of principal or amortisation of the
• The contractual terms of the financial asset give rise on premium/discount).
specified dates to cash flows that are solely payments
of principal and interest (SPPI) on the principal amount The most significant elements of interest within a lending
outstanding. The details of these conditions are outlined arrangement are typically the consideration for the
below: time value of money and credit risk. To make the SPPI
assessment, the Bank applies judgement and considers
4.9.5.1. Business model assessment relevant factors such as the currency in which the financial
The Bank determines its business model at the level that asset is denominated, and the period for which the interest
best reflects how it manages groups of financial assets to rate is set.
achieve its business objective.
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In contrast, contractual terms that introduce a more separated at the issue date.
than de minimis exposure to risks or volatility in the
contractual cash flows that are unrelated to a basic lending The Bank issues financial instruments with equity conversion
arrangement do not give rise to contractual cash flows rights, write-down and call options. When establishing the
that are solely payments of principal and interest on the accounting treatment for these non-derivative instruments,
amount outstanding. In such cases, the financial asset is the Bank first establishes whether the instrument is a
required to be measured at FVPL. compound instrument and classifies such instrument’s
components separately as financial liabilities, financial
4.9.6. Financial assets or financial liabilities held for assets, or equity instruments in accordance with IAS 32.
trading Classification of the liability and equity components of
The Bank classifies financial assets or financial liabilities as a convertible instrument is not revised as a result of a
held for trading when they have been purchased or issued change in the likelihood that a conversion option will be
primarily for short-term profit making through trading exercised, even when exercising the option may appear to
activities or form part of a portfolio of financial instruments have become economically advantageous to some holders.
that are managed together, for which there is evidence When allocating the initial carrying amount of a compound
of a recent pattern of short-term profit taking. Held-for- financial instrument to the equity and liability components,
trading assets and liabilities are recorded and measured in the equity component is assigned as the residual amount after
the statement of financial position at fair value. Changes deducting from the entire fair value of the instrument, the
in fair value are recognised in net trading income. Interest amount separately determined for the liability component.
and dividend income or expense is recorded in net trading The value of any derivative features (such as a call options)
income according to the terms of the contract, or when embedded in the compound financial instrument, other
the right to payment has been established. than the equity component (such as an equity conversion
option), is included in the liability component. Once the
Included in this classification are debt securities, equities, Bank has determined the split between equity and liability,
short positions and customer loans that have been acquired it further evaluates whether the liability component has
principally for the purpose of selling or repurchasing in the embedded derivatives that must be separately accounted
near term. for.
4.9.7. Equity instruments at FVOCI (Policy applicable 4.9.9. Financial assets and financial liabilities at fair
from 1 January 2018) value through profit or loss
Upon initial recognition, the Bank occasionally elects to Financial assets and financial liabilities in this category are
classify irrevocably some of its equity investments as those that are not held for trading and have been either
equity instruments at FVOCI and are not held for trading. designated by management upon initial recognition or are
Such classification is determined on an instrument-by- mandatorily required to be measured at fair value under
instrument basis. IFRS 9. Management only designates an instrument at
FVPL upon initial recognition when one of the following
Gains and losses on these equity instruments are never criteria are met. Such designation is determined on an
recycled to profit. Dividends are recognised in statement of instrument-by-instrument basis:
comprehensive income as other operating income when
the right of the payment has been established. Equity • The designation eliminates, or significantly reduces, the
instruments at FVOCI are not subject to an impairment inconsistent treatment that would otherwise arise from
assessment. measuring the assets or liabilities or recognising gains or
losses on them on a different basis or;
4.9.8. Debt issued and other borrowed funds • The liabilities and assets until 1 January 2018 under IAS
After initial measurement, debt issued and other borrowed 39 are part of a group of financial liabilities or financial
funds are subsequently measured at amortised cost. assets, or both under IAS 39, which are managed and
Amortised cost is calculated by taking into account any their performance evaluated on a fair value basis, in
discount or premium on issue funds, and costs that are an accordance with a documented risk management or
integral part of the EIR. A compound financial instrument investment strategy or;
which contains both a liability and an equity component is • The liabilities and assets until 1 January 2018 under
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IAS 39 containing one or more embedded derivatives,

unless they do not significantly modify the cash flows The nominal contractual value of financial guarantees,
that would otherwise be required by the contract, or it is letters of credit and undrawn loan commitments, where
clear with little or no analysis when a similar instrument the loan agreed to be provided is on market terms, are
is first considered that separation of the embedded not recorded on in the statement of financial position. The
derivative(s) is prohibited nominal values of these instruments together with the
corresponding ECLs are disclosed in the financial statement
Financial assets and financial liabilities at FVPL are recorded
in the statement of financial position at fair value. Changes The Bank occasionally issues loan commitments at below
in fair value are recorded in statement of comprehensive market interest rates drawdown. Such commitments are
income with the exception of movements in fair value of subsequently measured at the higher of the amount of
liabilities designated at FVPL due to changes in the Bank’s the ECL allowance and the amount initially recognised
own credit risk. Such changes in fair value are recorded less, when appropriate, the cumulative amount of income
in the fair value reserve through OCI and do not get recognised as outlined the financial statement.
recycled to the profit or loss. Interest earned or incurred
on instruments designated at FVPL is accrued in interest 4.10. Reclassification of financial assets and liabilities
income or interest expense, respectively, using the EIR, From 1 January 2018, the Bank does not reclassify its
taking into account any discount/ premium and qualifying financial assets subsequent to their initial recognition, apart
transaction costs being an integral part of instrument. from the exceptional circumstances in which the Bank
Interest earned on assets mandatorily required to be acquires, disposes of, or terminates a business line.
measured at FVPL is recorded using EIR as explained Financial liabilities are never reclassified. The Bank did not
in note 4.3.1. Dividend income from equity instruments reclassify any of its financial assets or liabilities in
measured at FVPL is recorded in profit or loss as other 2017.
operating income when the right to the payment has been
established. 4.11. Derecognition of financial assets and liabilities
4.9.10. Financial guarantees, letters of credit and 4.11.1. Derecognition due to substantial modification
undrawn loan commitments of terms and conditions
The Bank issues financial guarantees, letters of credit
and loan commitments. Financial guarantees are initially The Bank derecognises a financial asset, such as a loan
recognised in the financial statements (within Provisions) to a customer, when the terms and conditions have been
at fair value, being the premium received. Subsequent to renegotiated to the extent that, substantially, it becomes a
initial recognition, the Bank’s liability under each guarantee new loan, with the difference recognised as a derecognition
is measured at the higher of the amount initially recognised gain or loss, to the extent that an impairment loss has
less cumulative amortisation recognised in the statement not already been recorded. The newly recognised loans
of comprehensive income, and – under IAS 39 – the best are classified as Stage 1 for ECL measurement purposes,
estimate of expenditure required to settle any financial unless the new loan is deemed to be POCI.
obligation arising as a result of the guarantee, or under IFRS
9 an ECL provision as set out in the financial statement When assessing whether or not to derecognise a loan
The premium received is recognised in the statement of to a customer, amongst others, the Bank considers the
comprehensive income in Net fees and commission income following factors:
on a straight line basis over the life of the guarantee. • Change in currency of the loan
• Introduction of an equity feature
Undrawn loan commitments and letters of credits are • Change in counterparty
commitments under which, over the duration of the • If the modification is such that the instrument would no
commitment, the Bank is required to provide a loan with longer meet the SPPI criterion
pre-specified terms to the customer. Similar to financial
guarantee contracts, under IAS 39, a provision was made If the modification does not result in cash flows that are
if they were an onerous contract but, from 1 January 2018, substantially different, the modification does not result in
these contracts are in the scope of the ECL requirements. derecognition. Based on the change in cash flows discounted
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at the original EIR, the Bank records a modification gain or rewards of the asset or;
loss, to the extent that an impairment loss has not already • The Bank has neither transferred nor retained
been recorded. substantially all the risks and rewards of the asset, but
has transferred control of the asset
4.11.2. Derecognition other than for substantial
modification The Bank considers control to be transferred if and only if,
the transferee has the practical ability to sell the asset in its
4.11.2.1. Financial assets entirety to an unrelated third party and is able to exercise
A financial asset (or, where applicable, a part of a financial that ability unilaterally and without imposing additional
asset or part of a group of similar financial assets) is restrictions on the transfer.
derecognised when the rights to receive cash flows from
the financial asset have expired. The Bank also derecognises When the Bank has neither transferred nor retained
the financial asset if it has both transferred the financial substantially all the risks and rewards and has retained
asset and the transfer qualifies for derecognition. control of the asset, the asset continues to be recognised
only to the extent of the Bank’s continuing involvement, in
The Bank has transferred the financial asset if, and only which case, the Bank also recognises an associated liability.
if, either: The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations
• The Bank has transferred its contractual rights to receive that the Bank has retained.
cash flows from the financial asset or;
• It retains the rights to the cash flows, but has assumed Continuing involvement that takes the form of a guarantee
an obligation to pay the received cash flows in full over the transferred asset is measured at the lower of the
without material delay to a third party under a ‘pass– original carrying amount of the asset and the maximum
through’ arrangement amount of consideration the Bank could be required to
pay.
Pass-through arrangements are transactions whereby the
Bank retains the contractual rights to receive the cash If continuing involvement takes the form of a written or
flows of a financial asset (the ‘original asset’), but assumes purchased option (or both) on the transferred asset, the
a contractual obligation to pay those cash flows to one or continuing involvement is measured at the value the Bank
more entities (the ‘eventual recipients’), when all of the would be required to pay upon repurchase. In the case of
following three conditions are met: a written put option on an asset that is measured at fair
value, the extent of the entity’s continuing involvement
• The Bank has no obligation to pay amounts to the is limited to the lower of the fair value of the transferred
eventual recipients unless it has collected equivalent asset and the option exercise price.
amounts from the original asset, excluding short-term
advances with the right to full recovery of the amount 4.11.2.2. Financial liabilities
lent plus accrued interest at market rates A financial liability is derecognised when the obligation
• The Bank cannot sell or pledge the original asset other under the liability is discharged, cancelled or expires. Where
than as security to the eventual recipients an existing financial liability is replaced by another from the
• The Bank has to remit any cash flows it collects on same lender on substantially different terms, or the terms
behalf of the eventual recipients without material delay. of an existing liability are substantially modified, such an
In addition, the Bank is not entitled to reinvest such exchange or modification is treated as a derecognition of
cash flows, except for investments in cash or cash the original liability and the recognition of a new liability.
equivalents including interest earned, during the period The difference between the carrying value of the original
between the collection date and the date of required financial liability and the consideration paid is recognised in
remittance to the eventual recipients. profit or loss.
A transfer only qualifies for derecognition if either: 4.12. Impairment of financial assets (Policy applicable
from 1 January 2018)
• The Bank has transferred substantially all the risks and 4.12.1. Overview of the ECL principles
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As described in note 3.0. , the adoption of IFRS 9 has records an allowance for the LTECLs.
fundamentally changed the Bank’s loan loss impairment • POCI: Purchased or originated credit impaired (POCI)
method by replacing IAS 39’s incurred loss approach with assets are financial assets that are credit impaired on
a forward-looking ECL approach. From 1 January 2018, initial recognition. POCI assets are recorded at fair
the Bank has been recording the allowance for expected value at original recognition and interest income is
credit losses for all loans and other debt financial assets subsequently recognised based on a credit-adjusted
not held at FVPL, together with loan commitments and EIR. ECLs are only recognised or released to the extent
financial guarantee contracts, in this section all referred that there is a subsequent change in the expected credit
to as ‘financial instruments’. Equity instruments are not losses.
subject to impairment under IFRS 9.
For financial assets for which the Bank has no reasonable
The ECL allowance is based on the credit losses expected expectations of recovering either the entire outstanding
to arise over the life of the asset, the lifetime expected amount, or a proportion thereof, the gross carrying
credit loss (LTECL), unless there has been no significant amount of the financial asset is reduced. This is considered
increase in credit risk since origination, in which case, the a (partial) derecognition of the financial asset.
allowance is based on the 12 months’ expected credit loss
(12mECL) as outlined in note 4.12.2. The Bank’s policies 4.12.2. The calculation of ECLs
for determining if there has been a significant increase in The Bank calculates ECLs based on a four probability-
credit risk are set out in the financial statement. weighted scenarios to measure the expected cash shortfalls,
discounted at an approximation to the EIR. A cash shortfall
The 12mECL is the portion of LTECLs that represent is the difference between the cash flows that are due to an
the ECLs that result from default events on a financial entity in accordance with the contract and the cash flows
instrument that are possible within the 12 months after the that the entity expects to receive.
reporting date.
The mechanics of the ECL calculations are outlined below
Both LTECLs and 12mECLs are calculated on either an and the key elements are, as follows
individual basis or a collective basis, depending on the
nature of the underlying portfolio of financial instruments. • PD The Probability of Default is an estimate of the
likelihood of default over a given time horizon. A
The Bank has established a policy to perform an assessment, default may only happen at a certain time over the
at the end of each reporting period, of whether a financial assessed period, if the facility has not been previously
instrument’s credit risk has increased significantly since derecognised and is still in the portfolio.
initial recognition, by considering the change in the risk of • EAD The Exposure at Default is an estimate of the
default occurring over the remaining life of the financial exposure at a future default date, taking into account
instrument. expected changes in the exposure after the reporting
date, including repayments of principal and interest,
Based on the above process, the Bank groups its loans into whether scheduled by contract or otherwise, expected
Stage 1, Stage 2, Stage 3 and POCI, as described below: drawdowns on committed facilities, and accrued interest
from missed payments.
• Stage 1: When loans are first recognised, the Bank • LGD The Loss Given Default is an estimate of the
recognises an allowance based on 12mECLs. Stage 1 loss arising in the case where a default occurs at a
loans also include facilities where the credit risk has given time. It is based on the difference between the
improved and the loan has been reclassified from Stage contractual cash flows due and those that the lender
2. would expect to receive, including from the realisation
• Stage 2: When a loan has shown a significant increase of any collateral. It is usually expressed as a percentage
in credit risk since origination, the Bank records an of the EAD.
allowance for the LTECLs. Stage 2 loans also include When estimating the ECLs, the Bank considers four
facilities, where the credit risk has improved and the scenarios (a base case, an upside, a mild downside
loan has been reclassified from Stage 3. (‘downside 1’) and a more extreme downside (‘downside
• Stage 3: Loans considered credit-impaired. The bank 2’). Each of these is associated with different PDs, EADs
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and LGDs, as set out in note 4.12.5. When relevant, the the Bank estimates the expected portion of the loan
assessment of multiple scenarios also incorporate how commitment that will be drawn down over its expected
defaulted loans are expected to be recovered, including life. The ECL is then based on the present value of the
the probability that the loans will cure and the value of expected shortfalls in cash flows if the loan is drawn
collateral or the amount that might be received for selling down, based on a probability-weighting of the four
the asset. scenarios. The expected cash shortfalls are discounted
at an approximation to the expected EIR on the loan
With the exception of credit cards and other revolving for credit cards and revolving facilities that include
facilities, for which the treatment is separately set out in both a loan and an undrawn commitment, ECLs are
note 4.12.5, the maximum period for which the credit calculated and presented together with the loan. For
losses are determined is the contractual life of a financial loan commitments and letters of credit, the ECL is
instrument unless the Bank has the legal right to call it recognised within provisions.
earlier. Impairment losses and releases are accounted for • Financial guarantee contracts: The Bank’s liability
and disclosed separately from modification losses or gains under each guarantee is measured at the higher of the
that are accounted for as an adjustment of the financial amount initially recognised less cumulative amortisation
asset’s gross carrying value. recognised in the statement of comprehensive income,
and the ECL provision. For this purpose, the Bank
The mechanics of the ECL method are summarised below: estimates ECLs based on the present value of the
expected payments to reimburse the holder for a credit
• Stage 1: The 12mECL is calculated as the portion of loss that it incurs The shortfalls are discounted by the
LTECLs that represent the ECLs that result from default risk-adjusted interest rate relevant to the exposure. The
events on a financial instrument that are possible within calculation is made using a probability-weighting of the
the financial statement months after the reporting date. four scenarios. The ECLs related to financial guarantee
The Bank calculates the 12mECL allowance based on contracts are recognised within provisions.
the expectation of a default occurring in the 12 months
following the reporting date. These expected 12-month 4.12.3. Debt instruments measured at fair value
default probabilities are applied to a forecast EAD and through OCI
multiplied by the expected LGD and discounted by The ECLs for debt instruments measured at FVOCI do
an approximation to the original EIR. This calculation not reduce the carrying amount of these financial assets
is made for each of the four scenarios, as explained in the statement of financial position, which remains at
above. fair value. Instead, an amount equal to the allowance that
• Stage 2: When a loan has shown a significant increase would arise if the assets were measured at amortised
in credit risk since origination, the Bank records an cost is recognised in OCI as an accumulated impairment
allowance for the LTECLs. The mechanics are similar amount, with a corresponding charge to profit or loss.
to those explained above, including the use of multiple The accumulated loss recognised in OCI is recycled to the
scenarios, but PDs and LGDs are estimated over the statement of comprehensive income upon derecognition
lifetime of the instrument. The expected cash shortfalls of the assets.
are discounted by an approximation to the original EIR
• Stage 3: For loans considered credit-impaired the Bank 4.12.4. Purchased or originated credit impaired
recognises the lifetime expected credit losses for these financial assets (POCI)
loans. The method is similar to that for Stage 2 assets, For POCI financial assets, the Bank only recognises the
with the PD set at 100%. cumulative changes in LTECL since initial recognition in the
• POCI: POCI assets are financial assets that are credit loss allowance.
impaired on initial recognition. The Bank only recognises
the cumulative changes in lifetime ECLs since initial 4.12.5. Forward looking information
recognition, based on a probability-weighting of the In the Bank’s ECL models, the Bank relies on a broad
four scenarios, discounted by the credit adjusted EIR. range of forward looking information as economic inputs,
such as:
• Loan commitments and letters of credit: When • GDP growth
estimating LTECLs for undrawn loan commitments, • Unemployment rates
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• Exchange rates portfolio, but engages external agents to recover funds,

• Central Bank policy rates generally at auction, to settle outstanding debt. Any surplus
• House price indices funds are returned to the customers/obligors. As a result
of this practice, the residential properties under legal
The inputs and models used for calculating ECLs may repossession processes are not recorded on the statement
not always capture all characteristics of the market of financial position.
at the date of the financial statements. To reflect this,
qualitative adjustments or overlays are occasionally made 4.15. Impairment losses on financial assets
as temporary adjustments when such differences are The measurement of impairment losses both under IFRS 9
significantly material. and IAS 39 across all categories of financial assets requires
judgement, in particular, the estimation of the amount and
4.13. Collateral valuation timing of future cash flows and collateral values when
To mitigate its credit risks on financial assets, the Bank determining impairment losses and the assessment of
seeks to use collateral, where possible. The collateral comes a significant increase in credit risk. These estimates are
in various forms, such as cash, securities, letters of credit/ driven by a number of factors, changes in which can result
guarantees, real estate, receivables, inventories, other non- in different levels of allowances.
financial assets and credit enhancements such as netting
agreements. The Bank’s accounting policy for collateral The Bank’s ECL calculations are outputs of complex
assigned to it through its lending arrangements under IFRS models with a number of underlying assumptions regarding
9 is the same as it was under IAS 39. Collateral, unless the choice of variable inputs and their interdependencies.
repossessed, is not recorded on the Bank’s statement of Elements of the ECL models that are considered accounting
financial position. However, the fair value of collateral judgements and estimates include:
affects the calculation of ECLs. It is generally assessed, at a
minimum, at inception and re-assessed on a quarterly basis. • The Bank’s internal credit grading model, which assigns
However, some collateral, for example, cash or securities PDs to the individual grades
relating to margining requirements, is valued daily. • The Bank’s criteria for assessing if there has been a
significant increase in credit risk and so allowances for
To the extent possible, the Bank uses active market data financial assets should be measured on a LTECL basis
for valuing financial assets held as collateral. Other financial and the qualitative assessment
assets which do not have readily determinable market • The segmentation of financial assets when their ECL is
values are valued using models. Non-financial collateral, assessed on a collective basis
such as real estate, is valued by licensed professional • Development of ECL models, including the various
property valuers. formulas and the choice of inputs
Determination of associations between macroeconomic
4.14. Collateral repossessed scenarios and, economic inputs, such as unemployment
The Bank’s accounting policy under IFRS 9 remains levels and collateral values, and the effect on PDs,
the same as it was under IAS 39. The Bank’s policy is EADs and LGDs
to determine whether a repossessed asset can be best • Selection of forward-looking macroeconomic scenarios
used for its internal operations or should be sold. Assets and their probability weightings, to derive the economic
determined to be useful for the internal operations are inputs into the ECL models
transferred to their relevant asset category at the lower of
their repossessed value or the carrying value of the original 4.16. Cash and cash equivalents
secured asset. Assets for which selling is determined to be For the purposes of the statement of cash flow, cash and
a better option are transferred to assets held for sale at cash equivalents comprise cash on hand, cash and balances
their fair value (if financial assets) and fair value less cost with the Central Bank of Ghana and amounts due from
to sell for non-financial assets at the repossession date in, banks and other financial institutions.
line with the Bank’s policy.
4.17. Investment Securities
In its normal course of business, the Bank does not This comprises investments in short-term Government
physically repossess properties or other assets in its retail securities and medium term investments in Government
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and other securities such as open market operations Motor Vehicles - 5 – 7 years
(OMO) instruments, treasury bills and bonds. Investments Equipment - 5 – 10 years
in securities are categorised as FVTPL or FVOCI. Furniture and fittings - 5 – 7 years
4.18. Property and Equipment Depreciation methods, useful lives and residual values are
reassessed at the reporting date.
4.18.1 Recognition and measurement Gains and losses on disposal of property and equipment
Items of Property and Equipment are measured at cost are determined by comparing proceeds from disposal with
less accumulated depreciation and any accumulated the carrying amounts of property and equipment and are
impairment losses. recognised in profit or loss as other income.

Cost includes expenditures that are directly attributable to 4.19. Intangible assets
the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour and 4.19.1. Software
any other costs directly attributable to bringing the asset to Software acquired by the Group is measured at cost less
a working condition for intended use. Purchased software accumulated amortisation and accumulated impairment
that is integral to the functionality of the related equipment losses.
is capitalised as part of that equipment. Subsequent expenditure on software assets is capitalised
only when it increases the future economic benefits
When parts of an item of property or equipment have embodied in the specific asset to which it relates. All
different useful lives, they are accounted for as separate other expenditure is expensed as incurred. Amortisation is
items (major components) of Property and Equipment. recognised in profit or loss on a straight-line basis over the
estimated useful life of the software, from the date that it
The Bank owns landed properties that are revalued every is available for use. The estimated useful life of software
three years. Increases in the carrying amount arising on is ten years.
revaluation are credited to capital surplus. Decreases that
offset previous increases of the same asset are charged 4.20. Events After Reporting Date
against the capital surplus. Events after reporting date are reflected in the financial
statements only to the extent that they relate to the year
4.18.2. Subsequent costs under consideration and the effect is material.
The cost of replacing part of an item of property or
equipment is recognised in the carrying amount of the 4.21. Deposits, amounts due to Banks and
item if it is probable that the future economic benefits borrowings
embodied within the part will flow to the Group and its This is mainly made up of customer deposit accounts,
cost can be measured reliably. The costs of the day-to-day overnight placements by banks and other financial
servicing of Property and Equipment are recognised in the institutions and medium term borrowings. They are
statement of profit or loss as incurred. categorised as other financial liabilities measured in the
statement of financial position at amortised cost.
4.18.3. Depreciation
Depreciation is recognised in profit or loss on a straight- 4.22. Provisions/Contingent Liabilities
line basis over the estimated useful lives of each part of A provision is recognised if, as a result of a past event,
an item of Property and Equipment. Leased assets are the Group has a present legal or constructive obligation
depreciated over the shorter of the lease term and their that can be estimated reliably, and it is probable that an
useful lives. Land is not depreciated. outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the
The estimated useful lives for the current and comparative expected future cash flows at a rate that reflects current
periods are as follows: market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
Leasehold Buildings - over the remaining life of the lease
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Contingent liabilities are possible obligations whose 4.24.4 Defined benefit scheme
existence will be confirmed only by uncertain future events The Group’s net obligation in respect of defined benefit
or present obligations where the transfer of economic pension plans is calculated separately for each plan by
benefit is uncertain or cannot be reliably measured. estimating the amount of future benefit that employees
Contingent liabilities are not recognised but are disclosed have earned in return for their service in the current and
unless they are remote. prior periods; that benefit is discounted to determine its
present value, and any unrecognised past service costs.
4.23. Financial guarantees The discount rate is the yield at the reporting date on
Financial guarantees are contracts that require the Group a long-dated instrument on the Ghana market. The
to make specified payments to reimburse the holder for calculation is performed using the projected unit credit
a loss it incurs because a specified debtor fails to make method. Changes in the fair value of the plan liabilities
payment when due in accordance with the terms of a debt are recognised in the statement of comprehensive income.
instrument.
A provision is recognised for the amount expected to be
Financial guarantees are initially recognised at their fair paid under short-term cash bonus or profit-sharing plans if
value being the premium received, and the fair value is the Group has a present legal or constructive obligation to
amortised over the life of the financial guarantee. The pay this amount as a result of past service provided by the
financial guarantees are subsequently carried at the employee and the obligation can be estimated reliably.
higher of the amount initially recognised less cumulative
amortisation recognised in profit or loss, and the best 4.25. Impairment on non-financial assets
estimate of expenditure required to settle any financial The carrying amount of the Group’s non-financial assets
obligation arising as a result of the guarantee. Any increase other than deferred tax assets, are reviewed at each
in the liability is recorded in of profit or loss. The premium reporting date to determine whether there is any indication
received in the consolidated statement of profit or loss in of impairment. If any such indication exists then the asset’s
net fees and commission income on a straight line basis recoverable amount is estimated.
over the life of the guarantee.
An impairment loss is recognised if the carrying amount of
4.24. Employee benefits an asset exceeds its recoverable amount. The recoverable
amount of an asset is the greater of its value in use and
4.24.1. Defined contribution plans its fair value less costs to sell. Impairment losses are
Obligations for contributions to defined contribution pension recognised in profit or loss.
plans are recognised as an expense in the statement of
profit or loss when they are due. Impairment losses recognised in prior periods are assessed
at each reporting date for any indications that the loss
4.24.2. Termination benefits has decreased or no longer exists. An impairment loss is
Termination benefits are recognised as an expense when reversed if there has been a change in the estimates used
the Group is demonstrably committed, without realistic to determine the recoverable amount. An impairment loss
possibility of withdrawal, to a formal detailed plan to is reversed only to the extent that the asset’s carrying
terminate employment before the normal retirement amount does not exceed the carrying amount that would
date. Termination benefits for voluntary redundancies are have been determined, net of depreciation or amortisation,
recognised if the Group has made an offer encouraging if no impairment loss had been recognised.
voluntary redundancy, it is probable that the offer will be
accepted, and the number of acceptances can be estimated 4.26. Share capital
reliably.
4.26.1 Share issue costs
4.24.3. Short-term benefits Incremental costs directly attributable to the issue of new
Short-term employee benefit obligations are measured on shares or options or the acquisition of a business are shown
an undiscounted basis and are expensed as the related in equity as a deduction, net of tax, from the proceeds.
service is provided.
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4.26.2. Dividends on ordinary shares the recognition, measurement, presentation and disclosure
Dividends on ordinary shares are recognised in equity in of leases and requires lessees to account for all leases under
the period in which they are paid or, if earlier, approved by a single on-balance sheet model similar to the accounting
the shareholders of the bank. for finance leases under IAS 17. The standard includes two
recognition exemptions for lessees – leases of ’low-value’
4.26.3 Treasury shares assets (e.g., personal computers) and short-term leases
Where the Company or any member of the Group (i.e., leases with a lease term of 12 months or less). At the
purchases the Company’s shares, the consideration paid is commencement date of a lease, a lessee will recognise a
deducted from shareholders’ equity as treasury shares until liability to make lease payments (i.e., the lease liability) and
they are cancelled. Where such shares are subsequently an asset representing the right to use the underlying asset
sold or reissued, any consideration received is included in during the lease term (i.e., the right-of-use asset). Lessees
shareholders’ equity. will be required to separately recognise the interest expense
on the lease liability and the depreciation expense on the
4.27. Segment Reporting right-of-use asset.
An operating segment is a component of an entity:
• that engages in business activities from which it may earn Lessees will be also required to remeasure the lease liability
revenues and incur expenses (including revenues and upon the occurrence of certain events (e.g., a change in
expenses relating to transactions with other components the lease term, a change in future lease payments resulting
of the same entity) from a change in an index or rate used to determine those
• whose operating results are reviewed regularly by the payments). The lessee will generally recognise the amount
entity’s senior management to make decisions about of the remeasurement of the lease liability as an adjustment
resources to be allocated to the segment and assess its to the right-of-use asset.
performance and
• for which discrete financial information is available Lessor accounting under IFRS 16 is substantially unchanged
from today’s accounting under IAS 17. Lessors will continue
4.28. Earnings per share to classify all leases using the same classification principle
The Group presents basic and diluted earnings per share as in IAS 17 and distinguish between two types of leases:
(EPS) data for its ordinary shares. Basic EPS is calculated operating and finance leases.
by dividing the profit or loss attributable to ordinary
shareholders of the Bank after adjustments for preference IFRS 16 also requires lessees and lessors to make more
dividends by the weighted average number of ordinary extensive disclosures than under IAS 17.
shares outstanding during the period. The Bank has no
convertible notes and share options, which could potentially IFRS 16 is effective for annual periods beginning on or after
dilute its EPS and therefore the Group’s Basic and diluted 1 January 2019. Early application is permitted, but not before
EPS are essentially the same. an entity applies IFRS 15. A lessee can choose to apply
the standard using either a full retrospective or a modified
4.29. New standards and interpretations yet to be retrospective approach. The standard’s transition provisions
adopted permit certain reliefs.
During the year, there were some amendments, new
standards and interpretations as indicated below. Some of 4.29.2. IFRIC Interpretation 23 Uncertainty over
these are not expected to have significant impact on the Income Tax Treatment
Bank or its subsidiaries reporting. The Interpretation addresses the accounting for income
taxes when tax treatments involve uncertainty that affects
4.29.1. IFRS 16 Leases the application of IAS 12 and does not apply to taxes or levies
IFRS 16 was issued in January 2016 and it replaces IAS outside the scope of IAS 12, nor does it specifically include
17 Leases, IFRIC 4 Determining whether an Arrangement requirements relating to interest and penalties associated
contains a Lease, SIC-15 Operating Leases-Incentives and with uncertain tax treatments.
SIC-27 Evaluating the Substance of Transactions Involving
the Legal Form of a Lease. IFRS 16 sets out the principles for
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The Group has not accessed the potential impact of the improvement
standard on its financial statements and therefore the • Informs the Board of progress in implementing
impact is not known. The Group will adapt the standard for improvements.
the year ending 31 December 2019.
The Board has also established the Asset and Liability
The Interpretation specifically addresses the following: Management Committee (ALCO) and Risk Management
Department which are responsible for developing and
Whether an entity considers uncertain tax treatments monitoring risk management policies in their specified
separately areas.
• The assumptions an entity makes about the examination
of tax treatments by taxation authorities The risk management policies are established to identify and
• How an entity determines taxable profit (tax loss), tax analyse the risks faced by the Group, to set appropriate risk
bases, unused tax losses, unused tax credits and tax limits and controls, and to monitor risks and adherence to
rates limits. Risk management policies and systems are reviewed
• How an entity considers changes in facts and regularly to reflect changes in market conditions, products
circumstances and services offered. The Group, through its training and
An entity must determine whether to consider each management standards and procedures, aims to develop a
uncertain tax treatment separately or together with one or disciplined and constructive control environment, in which
more other uncertain tax treatments. The approach that all employees understand their roles and obligations.
better predicts the resolution of the uncertainty should be
followed. The interpretation is effective for annual reporting The Audit Committee of the Board is responsible for
periods beginning on or after 1 January 2019, but certain monitoring compliance with the risk management policies
transition reliefs are available. This is not expected to have a and procedures, and for reviewing the adequacy of the risk
significant impact on the bank’s financial statements. management framework in relation to the risks faced by the
Group. The Audit Committee is assisted in these functions
5.0. FINANCIAL RISK MANAGEMENT by Internal Audit and Internal Control Departments. Internal
Audit and Internal Control undertake both regular and ad-
5.1. Introduction and overview hoc reviews of risk management controls and procedures,
The Group has exposure to the following risks from its use the results of which are reported to the Audit Committee.
of financial instruments:
All Board committees are made up of non-executive
•credit risk •liquidity risk •market risk •operational risk members, with executives in attendance. The committees
report regularly to the Board of Directors on their activities.
This note presents information about the Group’s exposure
to each of the above risks, the Group’s objectives, policies 5.2. Credit risk
and processes for measuring and managing risk, and the Credit risk is the risk of financial loss to the Group if a
Group’s management of capital. customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from
5.1.1. Risk management framework the Group’s loans and advances to customers and other
The Board of Directors has overall responsibility for the banks and investment securities. For risk management
establishment and oversight of the risk management reporting purposes, the Group considers and consolidates
framework. The Risk Management Committee of the all elements of credit risk exposure (such as individual
Board assists the Board in carrying out this responsibility. obligor default risk and sector risk).
To enable it achieve its purpose, the Committee:
5.2.1. Management of credit risk
• Reviews and monitors aggregate risk levels in the The Board of Directors has delegated responsibility for
business and the quality of risk mitigation and controls the day-to-day management of credit risk to the Credit
for all areas of risk to the business Department and the overall management of credit risk
• Makes recommendations to management on areas of to the Risk Management Department. These departments
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report to the Board on a quarterly basis. The Risk Management Department monitors and manages
the Group’s global credit risk within the appetite approved
These departments responsibilities includes: by the Board and set as limits and controls within the Bank’s
Risk Management Policy statement. It also promotes and
• Formulating credit policies in consultation with
supports the development of good credit risk management
business units, covering collateral requirements, credit
practices.
assessment, risk grading and reporting, documentary
and legal procedures, and compliance with regulatory Regular audits of business units and credit processes are
and statutory requirements. undertaken by Internal Audit.
• Establishing the authorisation structure for the approval 5.2.2. Impaired loans and securities
and renewal of credit facilities. Authorisation limits are Impaired loans and securities are loans and securities for
allocated to approving authorities of the group. Larger which it has been determined that it is probable that it will
facilities require approval by the Credit Committee or be unable to collect all principal and interest due according
the Board of Directors as appropriate. to the contractual terms of the loan/securities agreement(s).
• Reviewing and assessing all credit exposures prior to
5.2.3. Past due but not impaired
facilities being committed to customers by the business
Loans and securities where contractual interest or principal
unit concerned. Renewals and reviews of facilities are
payments are past due but it is believed that impairment
subject to the same review process.
is not appropriate on the basis of the level of security
• Limiting concentrations of exposure to counterparties / collateral available and / or the stage of collection of
and industries (for loans and advances), and by issuer, amounts owed.
credit rating band and market liquidity.
5.2.4. Significant increase in credit risk
• Developing and maintaining risk grading in order to
The Group monitors all financial assets that are subject to
categorise exposures according to the degree of risk
impairment requirements to assess whether there has been
of financial loss faced and to focus management on
a significant increase in credit risk since initial recognition. If
the attendant risks. The risk grading system is used
there has been a significant increase in credit risk the Bank
in determining where impairment provisions may be
will measure the loss allowance based on lifetime rather
required against specific credit exposures. The current
than 12m ECL.
risk grading framework reflects the varying degrees of

risk of default and the availability of collateral or other
5.2.5. Internal credit risk rating
credit risk mitigation. The responsibility for setting risk
In order to minimise credit risk, the Group has tasked its
grades lies with the final approving authority.
credit department to develop and maintain the Group’s
Risk grades are subject to regular reviews by the Credit credit risk grading to categorise exposures according to
department. their degree of risk of default. The Group’s credit risk
• Reviewing compliance of business units with agreed grading framework comprises eight categories. The
exposure limits, including those for selected industries credit rating information is based on a range of data that
and product types. Regular reports are provided to loan is determined to be predictive of the risk of default and
review committee on the credit quality of loan portfolio applying experienced credit judgement.
and appropriate corrective action is taken.
• Providing advice, guidance and specialist skills to The nature of the exposure and type of borrower are
business units to promote best practice throughout in taken into account in the analysis. Credit risk grades are
the management of credit risk. defined using qualitative and quantitative factors that are
Each business unit is required to implement Group indicative of risk of default.
credit policies and procedures. Each business unit The credit risk grades are designed and calibrated to reflect
reports on all credit related matters to management. the risk of default as credit risk deteriorates. As the credit
Each business unit is responsible for the quality and risk increases the difference in risk of default between
performance of its credit portfolio and for monitoring grades changes. Each exposure is allocated to a credit
and controlling all credit risks in its portfolios.
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risk grade at initial recognition, based on the available credit risk has increased significantly per portfolio of assets.
information about the counterparty. The criteria used are both quantitative changes in PDs as
well as changes in qualitative factors.
All exposures are monitored and the credit risk grade is
updated to reflect current information. The monitoring The internal risk grading scale is as follows:
procedures followed are both general and tailored to the
type of exposure. Group’s Description of Average number
rating the grade of days outstanding
The following data are typically used to monitor the Bank’s
Grade A Low to fair risk less than 90 days
exposures:
Grade B Higher risk 90 days but less than

• Payment record, including payment ratios and ageing 120 days
analysis; Grade C Sub-standard 120 days less than
• Extent of utilisation of granted limit; 180 days
• Forbearances (both requested and granted); Grade D Doubtful 180 days less than
• Changes in business, financial and economic conditions; 360 days
• Credit rating information supplied by external rating Grade E Loss 360 days and above
agencies;
• For retail exposures: internally generated data of
Loan commitments are assessed along with the
customer behaviour, affordability metrics etc.; and
category of loan the Bank is committed to provide, i.e.
• For corporate exposures: information obtained by
commitments to provide mortgages are assessed using
periodic review of customer files including audited
similar criteria to mortgage loans, while commitments to
financial statements review, market data such as
provide a corporate loan are assessed using similar criteria
prices of credit default swaps (CDS) or quoted bonds
to corporate loans.
where available, changes in the financial sector the
customer operates etc.
Irrespective of the outcome of the above assessment,
the Group presumes that the credit risk on a financial
The Group uses credit risk grades as a primary input into
asset has increased significantly since initial recognition
the determination of the term structure of the PD for
when contractual payments are more than 90 days past
exposures. The Bank collects performance and default
due unless the Bank has reasonable and supportable
information about its credit risk exposures analysed by
information that demonstrates otherwise.
jurisdiction or region and by type of product and borrower
as well as by credit risk grading. The information used
The Group has monitoring procedures in place to make
is both internal and external depending on the portfolio
sure that the criteria used to identify significant increases
assessed.
in credit are effective, meaning that significant increase in
credit risk is identified before the exposure is defaulted or
The Group analyses all data collected using statistical models
when the asset becomes 90 days past due.
and estimates the remaining lifetime PD of exposures and
how these are expected to change over time. The factors
The Group performs periodic back-testing of its ratings
taken into account in this process include macro-economic
to consider whether the drivers of credit risk that led to
data such as GDP growth, unemployment, benchmark
default were accurately reflected in the rating in a timely
interest rates and house prices.
manner.

The Group generates a ‘base case’ scenario of the future
5.2.6. Incorporation of forward-looking information
direction of relevant economic variables as well as a
The Group uses forward-looking information that is
representative range of other possible forecast scenarios.
available without undue cost or effort in its assessment
The Bank then uses these forecasts, which are probability-
of significant increase of credit risk as well as in its
weighted, to adjust its estimates of PDs.
measurement of ECL.
The Group uses different criteria to determine whether
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The Group employs experts who use external and internal would expect to receive, taking into account cash flows
information to generate a ‘base case’ scenario of future from any collateral.
forecast of relevant economic variables along with a
representative range of other possible forecast scenarios. The LGD models for secured assets consider forecasts of
The external information used includes economic data and future collateral valuation taking into account sale discounts,
forecasts published by governmental bodies and monetary time to realisation of collateral, cross-collateralisation and
authorities. The Group applies probabilities to the forecast seniority of claim, cost of realisation of collateral and cure
scenarios identified. The base case scenario is the single rates (i.e. exit from non-performing status). LGD models
most-likely outcome and consists of information used by for unsecured assets consider time of recovery, recovery
the Bank for strategic planning and budgeting. rates and seniority of claims.
The Group has identified and documented key drivers of The calculation is on a discounted cash flow basis, where
credit risk and credit losses for each portfolio of financial the cash flows are discounted by the original EIR of the
instruments and, using a statistical analysis of historical loan. EAD is an estimate of the exposure at a future
data, has estimated relationships between macro- default date, taking into account expected changes in the
economic variables and credit risk and credit losses. The exposure after the reporting date, including repayments
Bank has not made changes in the estimation techniques of principal and interest, and expected drawdowns on
or significant assumptions made during the reporting committed facilities.
period.
The Group’s modelling approach for EAD reflects
Predicted relationships between the key indicators and expected changes in the balance outstanding over the
default and loss rates on various portfolios of financial lifetime of the loan exposure that are permitted by the
assets have been developed based on analysing historical current contractual terms, such as amortisation profiles,
data over the past years. early repayment or overpayment, changes in utilisation
of undrawn commitments and credit mitigation actions
5.2.7. Measurement of ECL taken before default.
The key inputs used for measuring ECL are:
• probability of default (PD); The Group uses EAD models that reflect the characteristics
• loss given default (LGD); and of the portfolios. The Group measures ECL considering
• exposure at default (EAD). the risk of default over the maximum contractual period
As explained above these figures are generally derived (including extension options) over which the entity is
from internally developed statistical models and other exposed to credit risk and not a longer period, even if
historical data and they are adjusted to reflect probability- contact extension or renewal is common business practice.
weighted forward-looking information. PD is an estimate However, for financial instruments such as, revolving credit
of the likelihood of default over a given time horizon. It is facilities and overdraft facilities that include both a loan
estimated as at a point in time. and an undrawn commitment component, the Bank’s
contractual ability to demand repayment and cancel the
The calculation is based on statistical rating models, and undrawn commitment does not limit the Bank’s exposure
assessed using rating tools tailored to the various categories to credit losses to the contractual notice period.
of counterparties and exposures. These statistical models
are based on market data (where available), as well as For such financial instruments the Group measures
internal data comprising both quantitative and qualitative ECL over the period that it is exposed to credit risk and
factors. PDs are estimated considering the contractual ECL would not be mitigated by credit risk management
maturities of exposures and estimated prepayment rates. actions, even if that period extends beyond the maximum
The estimation is based on current conditions, adjusted contractual period. These financial instruments do not
to take into account estimates of future conditions that have a fixed term or repayment structure and have a
will impact PD. LGD is an estimate of the loss arising short contractual cancellation period.
on default. It is based on the difference between the
contractual cash flows due and those that the lender
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However, the Group does not enforce in the normal 5.2.8. Credit quality analysis
day-to-day management the contractual right to cancel The Group monitors credit risk per class of financial
these financial instruments. This is because these financial instrument. The following table sets out information about
instruments are managed on a collective basis and are the credit quality of financial assets measured at amortised
cancelled only when the Group becomes aware of an cost, FVOCI debt investments (2018) and available-for-
increase in credit risk at the facility level. This longer sale debt assets (2017). Unless specifically indicated, for
period is estimated taking into account the credit risk financial assets, the amounts in the table represent gross
management actions that the Group expects to take to carrying amounts. For loan commitments and financial
mitigate ECL, e.g. reduction in limits or cancellation of the guarantee contracts, the amounts in the table represent
loan commitment. the amounts committed or guaranteed, respectively.
2018 2017
Stage 1 Stage 2 Stage 3 Total Total
Loans and advances to customers
Grade A 2,347,839 2,347,839 1,778,614
Grade B - 5,207 43,322 48,530 11,008
Grade C - 4,190 51,383 55,573 23,468
Grade D - 9,156 6,855 16,011 33,472
Grade E - 9,910 124,388 134,298 161,210
2,347,839 28,463 225,948 2,602,250 2,007,772
Loss allowance (17,767) (3,190) (153,291) (174,248) (154,098)

Carrying amount 2,330,072 25,273 72,657 2,428,002 1,853,674
Loan Commitments
Grade A 228,551 - - 228,551 -
Loss allowance (886) - - (886) -
Carrying amount 227,665 - - 227,665 -
Guarantees & Indemnities

Grade A 168,337 - - 168,337 240,037
Loss allowance (59) - - (59)
Carrying amount 168,278 - - 168,278 240,037
Letters of credit
Grade A 108,984 - - 108,984 127,117
Loss allowance (415) - - (415)
Carrying amount 108,569 - - 108,569 127,117
Investment Securities (FVTPL)

Grade A 1,523,321 - - 1,523,321 1,262,211
Carrying amount 1,523,321 - - 1,523,321 1,262,211

Investment Securities (FVOCI)
Grade A 276,118 - - 276,118 867,904
Carrying amount 276,118 - - 276,118 867,904
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5.2.5. Loans with renegotiated terms of homogeneous assets in respect of losses that have been
Loans with renegotiated terms are loans that have been incurred but have not been identified on loans subject to
restructured due to deterioration in the borrower’s financial individual assessment for impairment.
position and where the Group has made concessions
that it would not otherwise consider. Once the loan is 5.2.11. Write-off policy
restructured it remains in this category independent of The Group writes off a loan / security balance (and any
satisfactory performance after restructuring. related allowances for impairment losses) when loan
review committee determines that the loans / securities
5.2.10. Allowances for impairment are uncollectible. This determination is reached after
An allowance is established for impairment losses that the loan or security has been classified as “loss” for two
represents its estimate of incurred losses in its loan portfolio. consecutive years. All write-offs must be approved by the
The main components of this allowance are a specific loss Board and Bank of Ghana.
component that relates to individually significant exposures,
Set out below is an analysis of the gross amounts of loans
and a collective loan loss allowance established for groups
written-off.
Loans and Advances Written-off

2018 2017
Bank Group Bank Group
Balance at the beginning 217,528 217,528 215,632 215,632

Write-offs during the year 68,377 68,377 18,725 18,725
Recovery during the year (6,067) (6,067) (16,829) (16,829)

Balance at the end 279,838 279,838 217,528 217,528
5.2.12. Maximum Credit Exposure

At the financial position date, the maximum credit risk exposure of the Bank in the event of other parties failing to perform
their obligations is detailed below. No account has been taken of any collateral held and the maximum exposure to loss is
considered to be the instruments’ financial position carrying amount, or for non-derivative off financial position transactions
their contractual nominal amounts.
Credit risk exposures of financial assets on the statement of financial position are as follows:
2018 2017
Cash and Cash Equivalents 637,565 637,570 512,376 512,376
Invesment Securities 1,799,439 1,815,912 1,479,153 1,486,965
Loans and Advances to Customers 2,428,002 2,422,952 1,853,674 1,853,674
Other Assets 68,527 71,063 51,039 55,085
4,933,533 4,947,497 3,896,242 3,908,100
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Credit collateral
The Group holds collateral against loans and advances to Management monitors the market values of collaterals
customers in the form of mortgage interests over property, and will request additional collaterals in accordance with
other registered securities over assets, and guarantees. the underlying agreement where necessary.
Estimates of fair value are based on the value of collateral
Collateral repossessed
assessed at the time of borrowing, and generally are
During the year collateral valued at GH¢104 million was
updated every three years. Collateral generally is not
repossessed by the bank. No assets was repossessed by
held over loans and advances to banks, except where
the bank in 2017.
the counterparty bank assigns securities in the form of

treasury bills or government bonds. Collateral usually is not
Credit risk concentration
held against investment securities, and no such collateral
The Group monitors concentrations of credit risk by
was held at 31 December 2018 or 2017.
business industry and by type of customer. An analysis of
concentrations of credit risk by business industry at the
The main types of collateral obtained includes mortgages
reporting date is shown below:
over commercial and residential properties, inventory,
trade receivables, and cash collateral.
Loans and Advances to Customers

Exposure to Credit Risk
2018 2017
Carrying Amount 2,428,002 2,422,952 1,853,674 1,853,674

Concentration by industry
Agriculture, Forestry & Fishing 28,279 28,279 992 992
Mining and Quarrying 27,356 27,356 39,132 39,132
Manufacturing 155,266 155,266 153,019 153,019
Construction 514,640 514,640 369,210 369,210
Electricity, gas and water 145,837 145,837 213,688 213,688
Commerce and Finance 603,179 598,129 506,806 506,806
Transport, Storage and Communications 313,603 313,603 189,985 189,985
Services 689,864 689,864 426,228 426,228
Miscellaneous 124,226 124,226 108,712 108,712
2,602,250 2,597,200 2,007,772 2,007,772
Allowance for Impairment (174,248) (174,248) (154,098) (154,098)

2,428,002 2,422,952 1,853,674 1,853,674
Concentration by type of customer
Private Enterprises 2,057,229 2,052,179 1,756,832 1,756,832
Joint Private & State Enterprises 444,139 444,139 152,227 152,227
Individuals 100,882 100,882 98,713 98,713
2,602,250 2,597,200 2,007,772 2,007,772
Allowance for Impairment (174,248) (174,248) (154,098) (154,098)

2,428,002 2,422,952 1,853,674 1,853,674
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Settlement risk
The Group’s activities may give rise to risk at the time of The Group maintains information regarding the liquidity
settlement of transactions and trades. Settlement risk is profile of its financial assets and liabilities and details of
the risk of loss due to the failure of a company to honour other projected cash flows arising from projected future
its obligations to deliver cash, securities or other assets as business. The Treasury department then maintains a
contractually agreed. portfolio of short-term liquid assets, largely made up of
short-term liquid investment securities, loans and advances
For certain types of transactions the Group mitigates this to banks and other inter-bank facilities, to ensure that
risk by conducting settlements through a settlement/ sufficient liquidity is maintained within the Group as a
clearing agent to ensure that a trade is settled only when whole. The liquidity requirements of the businesses are
both parties have fulfilled their contractual settlement met through various deposit mobilisation strategies, short-
obligations. Settlement limits form part of the credit term loans from the inter-bank market to cover any short-
approval / limit monitoring process described earlier. term fluctuations and longer term funding to address any
structural liquidity requirements.
5.3. Liquidity risk
Liquidity risk is the risk that the Group will encounter 5.3.2. Exposure to liquidity risk
difficulty in meeting obligations from its financial liabilities. The matching and control of the maturities and interest
rates of assets and liabilities is fundamental to the
5.3.1. Management of liquidity risk management of the bank and the group. It is unusual for
The Group’s approach to managing liquidity is to ensure, banks to be completely matched since business transacted
as far as possible, that it will always have sufficient liquidity is often of uncertain term and of different types. An
to meet its liabilities when due, under both normal and unmatched position may potentially enhance profitability,
stressed conditions, without incurring unacceptable losses but may also increase the risk of losses.
or risking damage to the Group’s reputation.
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The following table provides detail on the residual maturity of all financial instruments, other assets and liabilities etc. for the
group:
2018 Bank
Carrying Less Than 1-3 3-6 6 months 1 to 3 3-5 More than
Amount 1 month months months to 1 year years years 5 years
Assets
Cash and Cash Equivalents 637,565 637,565 - - - - - -
Invesment Securities 1,799,439 685,434 150,356 234,861 65,091 471,153 71,712 120,832
Loans and Advances to Customers 2,428,002 322,705 301,121 98,561 203,715 229,172 411,984 860,744
Investments in Subsidiaries 2,038 - - - - - - 2,038
Deferred Tax Assets 14,891 - - - - - - 14,891
Intangible Assets 19,901 - - - - - - 19,901
Other Assets 68,527 -
40,873 27,654 - - - -
Property and Equipment 435,493 - - - - - - 435,493
Total Assets 5,405,856 1,645,704 492,350 361,076 268,806 700,325 483,696 1,453,899
Liabilities
Deposits From Banks and
Other Financial Institutions 78,161 24,202 14,021 22,105 2,826 759 607 13,641
Deposits From Customers 3,078,682 1,265,822 512,868 729,005 314,411 107,026 111,973 37,577
Borrowings 1,319,932 89,526 185,801 323,944 129,686 103,264 325,350 162,361
Current Tax Liabilities 7,273 - 7,273 - - - - -
Other Liabilities 157,236 88,656
44,748 23,832 - - - -
Total Liabilities 4,641,284 1,468,206 764,711 1,098,886 446,923 211,049 437,930 213,579
Period liquidity gap 764,572 177,498 (272,361) (737,810) (178,117) 489,276 45,766 1,240,320
Cummulative liquidity gap 764,572 177,498 (94,863) (832,673) (1,010,790) (521,514) (475,748) 764,572
Contingent Liabilities 277,321 - 234,770 15,018 15,018 12,515 - -
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2018 Group
Assets
Invesment Securities 1,815,912 685,434 150,356 234,861 81,564 471,153 71,712 120,832
Current Tax Assets 512 - 512 - - - - -
Intangible Assets 20,632 - - - - - -
20,632
Other Assets 71,063 -
40,873 30,190 - - - -
Total Assets 5,419,299 1,640,659 492,862 363,612 285,279 700,325 483,696 1,452,866
Liabilities
Deposits From Banks and
Other Financial Institutions 71,371 24,202 14,021 15,315 2,826 759 607 13,641
Deposits From Customers 3,078,682 1,265,822 512,868 729,005 314,411 107,026 111,973 37,577
Borrowings 1,319,932 89,526 185,801 323,944 129,686 103,264 325,350 162,361
Other Liabilities 162,568 88,656
44,748 29,164 - - - -
Total Liabilities 4,639,854 1,468,206 764,739 1,097,428 446,923 211,049 437,930 213,579
Period liquidity gap 779,445 172,453 (271,877) (733,816) (161,644) 489,276 45,766 1,239,287

Cummulative liquidity gap 779,445 172,453 (99,424) (833,240) (994,884) (505,608) (459,842) 779,445
2017 Bank

Assets

Investment Securities 1,479,153 867,910 24,043 317,422 52,828 15,473 80,698 120,779
Investments in Subsidiaries 2,038 - - - - - - 2,038
Other Assets 51,039 - 27,397 23,642 - - - -
Total Assets 4,212,638 1,772,070 252,492 419,299 275,592 332,352 292,094 868,739
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Carrying
Less Than 1-3 3-6 6 months 1 to 3 3-5 More than
Amount
Liabilities 1 month months months to 1 year years years 5 years
Deposits From Banks and Other-

Financial Institutions 84,913 11,292 23,103 14,432 9,875 8,623 7,140 10,448
Deposits From Customers 2,428,201 653,604 488,980 349,616 527,729 333,801 55,219 19,252
Borrowings 931,816 88,013 60,064 466,390 45,128 79,525 66,659 126,037
Other Liabilities 118,445 41,351 20,810 56,284 - - - -
Total Liabilities 3,565,211 794,260 594,793 886,722 582,732 421,949 129,018 155,737
Period liquidity gap 647,427 977,810 (342,301) (467,423) (307,140) (89,597) 163,076 713,002
Cummulative liquidity gap 647,427 977,810 635,509 168,086 (139,054) (228,651) (65,575) 647,427
2017 Group
Assets

Investment Securities 1,486,965 875,722 24,043 317,422 52,828 15,473 80,698 120,779
Current Tax Assets 600 - 600 - - - - -
Other Assets 55,085 - 27,397 27,688 - - - -
Total Assets 4,223,138 1,779,882 253,092 423,345 275,592 332,352 292,094 866,781
Liabilities
Deposits From Banks and Other-
Financial Institutions 69,422 11,292 7,612 14,432 9,875 8,623 7,140 10,448
Deposits From Customers 2,428,201 653,604 488,980 349,616 527,729 333,801 55,219 19,252
Borrowings 931,816 88,013 60,064 466,390 45,128 79,525 66,659 126,037
Deferred Tax Liabilities 8 - - - - - - 8
Other Liabilities 119,785 41,370 22,131 56,284 - - - -
Total Liabilities 3,551,068 794,279 580,623 886,722 582,732 421,949 129,018 155,745
Period liquidity gap 672,070 985,603 (327,531) (463,377) (307,140) (89,597) 163,076 711,036
Cumulative liquidity gap 672,070 985,603 658,072 194,695 (112,445) (202,042) (38,966) 672,070
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The Group’s financial liabilities are valued on the basis of date. The matching and control of the maturities and
their earliest possible contractual maturity. The Group’s interest rates of assets and liabilities is fundamental to the
expected cash flows on these instruments vary significantly management of the bank.
from this analysis. For example, demand deposits from
customers are expected to maintain a stable or increasing 5.3.3. Available Counterparty Liquidity
balance. The Group has available lines of credit from its counterparties
to finance its business. The table below summarizes the
The table above analyses assets and liabilities of the group Group’s available lines of credit at year-end and the
into relevant maturity groupings based on the remaining amounts stated in the table are the cedi equivalent of the
period at the reporting date to the contractual maturity foreign currencies.
Description 2018 2017

Lines for letters of credit establishment 1,382,751 1,382,751 1,553,814 1,553,814

Lines for letters of credit refinancing/ payment 650,700 650,700 949,365 949,365
5.4. Market risks cash flows or fair values of financial instrument because
Market risk is the risk that changes in market prices, such of a change in market interest rates. Interest rate risk is
as interest rate, equity prices, foreign exchange rates and managed principally through monitoring interest rate gaps
credit spreads (not relating to changes in the obligor’s / and by having pre-approved limits for re-pricing bands. The
issuer’s credit standing) will affect the Group’s income or the ALCO is the monitoring body for compliance with these
value of its holdings of financial instruments. The objective limits and is assisted by Risk Management department in
of market risk management is to manage and control its day-to-day monitoring activities.
market risk exposures within acceptable parameters, while
optimising the return on risk. The management of interest rate risk against interest rate
gap limits is supplemented by monitoring the sensitivity
5.4.1. Management of market risks of the Group’s financial assets and liabilities to various
The Group separates its exposure to market risk between standard and non-standard interest rate scenarios.
trading and non-trading portfolios. Trading portfolios mainly Standard scenarios that are considered on a monthly basis
are held by the brokerage subsidiary, and include positions include a 100 basis point (bp) parallel fall or rise in all yield
arising from market making and proprietary position curves and a 50 bp parallel fall or rise in all yield curves.
taking, together with financial assets and liabilities that are An analysis of the Group and company’s sensitivity to an
managed on a fair value basis. increase or decrease in market interest rates (assuming
no asymmetrical movement in yield curves and a constant
Overall authority for market risk is vested in ALCO. The balance sheet position) is as follows:
Risk Management Department is responsible for the
development of detailed risk management policies (subject
to review and approval by the Board) and for the day-to-
day review of their implementation.
5.4.2. Exposure to interest rate risk – non-trading

portfolios
The principal risk to which non-trading portfolios are
exposed is the risk of loss from fluctuations in the future
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100 bp 100 bp 50 bp 50 bp
parallel parallel parallel parallel
Sensitivity of projected net interest income
increase decrease increase decrease
At 31 December 2018 1,869 (1,869) 935 (935)

At 31 December 2017 3,655 (3,655) 1,827 (1,827)
5.4.3. Concentration of assets, liabilities and off balance sheet items

Banks take on foreign currency exchange rate exposure on their financial position and cash flows.
The table below summarises the group and bank’s exposure to foreign currency exchange rate risks at year-end.
The amounts stated in the table are the Ghana Cedi equivalent of the foreign currencies.
US British
2018 Euro Others Total
Dollars Pounds
Assets
Cash and Cash Equivalents 63,806 20,858 28,161 2,595 115,420
Loans and Advances to Customers 1,101,461 2 95 - 1,101,558
Other Assets 521 - - - 521

Total Assets 1,165,788 20,860 28,256 2,595 1,217,499

Liabilities
Deposits From Customers 497,275 17,976 33,949 - 549,200
Borrowings 1,197,218 - - - 1,197,218
Other Liabilities 25,510 4 448 - 25,962

Total Liabilities 1,720,003 17,980 34,397 - 1,772,380

Net On-Balance Sheet Position (554,215) 2,880 (6,141) 2,595 (554,881)

Off-Balance Sheet Credit Commitments 286,981 5,431 44,726 - 337,138

Total Exposure (267,234) 8,311 38,585 2,595 (217,743)
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2017 US British
Euro Others Total
Assets Dollars Pounds
Cash and Cash Equivalents 131,088 9,415 39,865 2,597 182,965

Loans and Advances to Customers 710,685 6 74 - 710,765
Other Assets 3,280 - - - 3,280
Total Assets 845,053 9,421 39,939 2,597 897,010
Liabilities
Deposits From Customers 379,872 9,492 29,069 - 418,433
Borrowings 797,911 - - - 797,911
Other Liabilities 23,521 967 1,302 - 25,790
Total Liabilities 1,201,304 10,459 30,371 - 1,242,134
Net On-Balance Sheet Position (356,251) (1,038) 9,568 2,597 (345,124)
Off-Balance Sheet Credit Commitments 262,906 5,251 42,968 - 311,125
Total Exposure (93,345) 4,213 52,536 2,597 (33,999)
5.4.4. Currency risk and equity (due to the fair value of currency sensitive non–
Currency risk is the risk that the value of a financial trading monetary assets and liabilities).
instrument will fluctuate due to changes in foreign exchange
rates. The Board has set limits on positions by currency. In Negative amount in the table reflects a potential net
accordance with the Bank’s policy, positions are monitored reduction in statement of profit or loss or equity, while
on a daily basis. a positive amount reflects a net potential increase. An
equivalent decrease in each of the currencies below against
The table below indicates the currencies to which the Group the cedis would have resulted in an equivalent but opposite
had significant exposure at 31 December 2017 and 2016 impact.
on its monetary assets and liabilities and its forecast cash
flows. The analysis calculates the effect of a reasonably
possible movement of the currency rate against the cedis
(all other variables being held constant) on profit or loss
2018 2017
Exchange Change in Effect on Exchange Change in Effect on
Rate at currency profit before Rate at currency profit before
31 Dec rate tax 31 Dec rate tax
US Dollars 4.8200 9% (50,751) 4.4157 5% (18,274)

British Pounds 6.1711 3% 99 5.9669 15% (154)
Euro 5.5131 4% (251) 5.2964 19% 1,854
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5.5. Operational risks 5.6. Capital management

Regulatory capital
Operational risk is the risk of direct or indirect loss arising
from a wide variety of causes associated with the Group’s The Bank’s lead regulator, the Bank of Ghana, monitors
processes, personnel, technology and infrastructure, and capital requirements for the Bank. In implementing current
from external factors other than credit, market and liquidity capital requirements the Bank of Ghana requires the Bank
risks such as those arising from legal and regulatory to maintain a prescribed ratio of total capital to total risk-
requirements and generally accepted standards of corporate weighted assets.
behaviour. Operational risks arise from all of the Group’s
operations and are faced by all business entities. The Bank’s regulatory capital is analysed into two tiers:
The Group’s objective is to manage operational risk so as Tier 1 capital, which includes ordinary share capital,
to balance the avoidance of financial losses and damage retained earnings and minority interests after deductions
to the Group’s reputation with overall cost effectiveness for goodwill and intangible assets, and other regulatory
and to avoid control procedures that restrict initiative and adjustments relating to items that are included in equity
creativity. but are treated differently for capital adequacy purposes.
The primary responsibility for the development and Tier 2 capital, which includes qualifying subordinated
implementation of controls to address operational risk liabilities and the element of the fair value reserve relating
is assigned to senior management within each business to unrealised gains on equity instruments classified as
unit. This responsibility is supported by the development of available-for-sale.
overall Group standards for the management of operational
risk in the following areas: The carrying amounts of investments in subsidiaries
• requirements for appropriate segregation of duties, that are not included in the regulatory consolidation and
including the independent authorisation of transactions investments in the capital of banks and certain other
• requirements for the reconciliation and monitoring of regulatory items are deducted from capital.
transactions
• compliance with regulatory and other legal requirements The banks operations are categorised as either trading book
• documentation of controls and procedures or banking book, and risk-weighted assets are determined
• requirements for the periodic assessment of operational according to specified requirements that seek to reflect the
risks faced, and the adequacy of controls and procedures varying levels of risk attached to assets and off-balance
to address the risks identified sheet exposures.
• requirements for the reporting of operational losses and
proposed remedial action The Group’s policy is to maintain a strong capital base so
• development of contingency plans as to maintain investor, creditor and market confidence
• training and professional development and to sustain future development of the business. The
• ethical and business standards impact of the level of capital on shareholders’ return is
• risk mitigation, including insurance where this is effective. also recognised and the Group recognises the need to
maintain a balance between the higher returns that might
Compliance with Group standards is supported by a be possible with greater gearing and the advantages and
programme of periodic reviews undertaken by Internal Audit, security afforded by a sound capital position.
Internal Control, Risk and Compliance Departments. The
results of these reviews are discussed with the management The Group and its individually regulated operations have
of the business unit to which they relate, with summaries complied with all externally imposed capital requirements
submitted to the Senior Management Committee, Audit throughout the period.
Committee, Risk Management Committee and the Board.
There have been no material changes in the Group’s
management of capital during the period.
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Bank of Ghana (BoG), in its bid to ensure the stability of third and fourth parts provide guidance on the role of
the Ghanaian Banking Sector and keep pace with global the board in the management of credit, operational and
development and growth in risk management practices market risk respectively. Guidelines for the computation
rolled out, in October 2017, a Capital Requirement Directive of credit risk weighted asset, operational and market risk
(CRD) which require banks to implement Pillar 1 principles capital charges are also detailed in the CRD document.
of Basel II and the Basel III Capital Framework effective 1
January 2019. It is expected that the implementation of Basel principles
will have an impact on the overall risk culture of banks and
The Capital Requirement Directive has four main parts, the will ultimately enhance the risk and capital management
first part provides principles for capital management and of banks.
the constituents of eligible regulatory capital. The second,
The regulatory capital position at 31 December was as follows:

2018 2017
Tier 1 capital
Ordinary share capital 400,000 400,000 100,000 100,000
Disclosed Reserves 302,922 318,448 439,195 464,445
Income Surplus 58,140 73,666 275,883 301,133

Statutory Reserves 244,782 244,782 163,312 163,312

Less:
Regulatory Deductions (66,797) (67,174) (34,905) (32,950)
Total 636,125 651,274 504,290 531,495

Tier 2 capital
Fair Value Reserves (16,638) (16,707) (7,163) (7,252)
Revaluation Reserve 31,123 31,123 31,763 31,763
Qualifying subordinated liabilities 31 141,082 141,082 128,826 128,826
Total 155,567 155,498 153,426 153,337

Total regulatory capital 791,692 806,772 657,716 684,832

Risk-weighted assets
On-balance sheet items 2,944,093 2,958,616 2,371,057 2,381,592
Off-balance sheet items 277,321 277,321 367,154 367,154
Total risk-weighted assets 3,221,414 3,235,937 2,738,211 2,748,746

50% of net open position (NOP) 20,211 20,211 17,280 17,280
100% of 3yrs average annual gross income 397,409 410,142 354,608 364,372

Adjusted Asset Base 3,639,034 3,666,290 3,110,099 3,130,398

Capital ratios
Capital Adequacy (Total Regulatory Capital as
a percentage of Adjusted Asset Base) 21.8% 22.0% 21.1% 21.9%

Regulatory Deductions
Goodwill/Intangibles 64,625 67,174 32,867 32,950
Invests in the capital of Other Banks & Fin Insts. 2,172 - 2,038 -
66,797 67,174 34,905 32,950
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5.6.1. Capital allocation

The allocation of capital between specific operations and activities is, to a large extent, driven by optimisation of the return
achieved on the capital allocated. The amount of capital allocated to each operation or activity is based primarily upon the
regulatory capital, but in some cases the regulatory requirements do not reflect fully the varying degree of risk associated
with different activities. In such cases the capital requirements may be flexed to reflect differing risk profiles, subject to the
overall level of capital to support a particular operation or activity not falling below the minimum required for regulatory
purposes.
“Although maximisation of the return on risk-adjusted capital is the principal basis used in determining how capital is al-
located within the Group to particular operations or activities, it is not the sole basis used for decision making. Account also
is taken of synergies with other operations and activities, the availability of management and other resources, and the fit
of the activity with the Group’s longer term strategic objectives. The Group’s policies in respect of capital management and
allocation are reviewed regularly by the Board of Directors.”
Regulatory Quantitative Disclosures

2018 2017
Capital Adequacy Ratio 21.8% 22.0% 21.1% 21.9%

Non - Performing Ratio 8.0% 8.0% 10.9% 10.9%
Liquid Ratio 104% 104% 125% 125%
Compliance with statutory liquidity requirement
(i) Default in Statutory Liquidity Nil Nil Nil Nil

(ii) Default in Statutory Liquidity Sanction (GH¢’000) Nil Nil Nil Nil
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6.0. USE OF ESTIMATES AND

JUDGEMENTS Determining fair values
Management discussed with the Audit Committee the The determination of fair value for financial assets and
development, selection and disclosure of the Group’s critical liabilities for which there is no observable market price
accounting policies and estimates, and the application of requires the use of valuation techniques as described in
these policies and estimates. note 8. For financial instruments that trade infrequently
and have little price transparency, fair value is less objective,
These disclosures supplement the commentary on financial and requires varying degrees of judgement depending
risk management (see note 5). on liquidity, concentration, uncertainty of market factors,
pricing assumptions and other risks affecting the specific
Key sources of estimation uncertainty instrument.
Allowances for credit losses
Assets accounted for at amortised cost are evaluated Critical accounting judgements made in applying the
for impairment on a basis described in accounting policy Group’s accounting policies include:
note 4.
Financial asset and liability classification
The specific counter party component of the total allowances The Group’s accounting policies provide scope for assets
for impairment applies to claims evaluated individually and liabilities to be designated on inception into different
for impairment and is based upon management’s best accounting categories in certain circumstances:
estimate of the present value of the cash flows that are
expected to be received. In estimating these cash flows, In classifying financial assets or liabilities as amortised cost,
management makes judgements about a counter party’s the Group has determined that it meets the description
financial situation and the net realisable value of any of trading assets and liabilities set out in accounting policy
underlying collateral. Each impaired asset is assessed on note 4.9.4.
its merits, and the workout strategy and estimate of cash
flows considered recoverable are independently approved In designating financial assets or liabilities at fair value
by the Credit Risk function. through profit or loss, the Group has determined that it
has met one of the criteria for this designation set out in
Collectively assessed impairment allowances cover credit accounting policy note 4.9.4.
losses inherent in portfolios of claims with similar economic
characteristics when there is objective evidence to suggest
that they contain impaired claims, but the individual
impaired items can not yet be identified. In assessing the
need for collective loan loss allowances, management
considers factors such as credit quality, portfolio size,
concentrations, and economic factors. In order to estimate
the required allowance, assumptions are made to define
the way inherent losses are modelled and to determine the
required input parameters, based on historical experience
and current economic conditions.
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7.0. OPERATING SEGMENTS
The group has five reportable segments. Information performance is evaluated based on operating profit or
regarding each reportable segment is presented below. loss which in certain respects is measured differently from
For management purposes the group is organised into five operating profit or loss in the financial statements.
reportable segments based on products and services as
follows; Transactions between operating segments are on an arm’s
length basis in a manner similar to transactions with third
• Corporate Banking: is responsible for providing loans parties.
and other credit facilities, as well as deposits and
other transactions and balances to corporate clients, Interest income is reported net, as management primarily
institutional clients and public sector entities. It also relies on net interest revenue as a performance measure,
provides corporate finance services, mergers and not the gross income and expense.
acquisitions advice, specialised financial advice and
custody services. For the purpose of segmental reporting, surplus funds or
deficit per business unit is either sold to or purchased from
• Retail & Business Banking: provide loans and overdrafts the Bank pool based on a pool rate determined by Treasury
as well as handles the deposits and other transactions using the Bank’s cost of funds plus a margin for both local
of small and medium enterprises (SMES), individuals and foreign currencies.
customers such as funds transfer, standing orders and
ATM’s Card services. The assets that are not allocated to any reportable segment
are made up of other assets, current tax assets, deferred
• Treasury: undertakes the Bank’s funding and centralised tax assets, property and equipment, intangible assets and
risk management activities through borrowings, and cash balances held at head office. The liabilities are also
investing in liquid assets such as short-term placements made up of current tax liabilities, deferred tax liabilities,
and government debt securities. It also trade in foreign accruals and other liabilities that are not allocated to any
currencies. business.
Brokerage: subscribe for, underwrite, buy, hold,

• No single customer revenue is 10% or more of the total
manage, and sell securities either on or off a stock external revenue
exchange either as principals or agents. It also provides
issuing house underwriting services and sponsorship to The tables below shows an analysis of the performance of
corporate clients. the business units of the Group.
Asset
• Management: provide asset management,
investment portfolio management, cash management,
money management and other investment advisory
services to institutional investors, businesses and high
net worth individuals and manage mutual funds.
Management monitors the operating results of its business

units separately for the purpose of making decisions about
resource allocation and performance assessment. Segment
68
7.0. Operating segments (Continued)
The Group has five reportable segments. Information regarding each reportable segment is presented below.
Corporate
Consumer & Retail Asset
Banking & Treasury Brokerage Unallocated Consolidated
Business Banking Management
Project Finance
31 December 2018
External Revenues
Net Interest Income 124,645 199,105 96,945 622 312 - 421,629
Net Fees and Commissions 29,480 31,292 1,351 60 7,360 - 69,543
Net Trading Income - - 27,106 - - - 27,106
Other Operating Income 571 159 - 249 - - 979
Intersegment Revenue (5,320) - - 2,847 2,473 - -
Total Segment Revenues 149,376 230,556 125,402 3,778 10,145 - 519,257
Operating Costs (35,015) (92,447) (5,043) (3,515) (2,786) (157,545) (296,351)
Segment Results 114,361 138,109 120,359 263 7,359 (157,545) 222,906
Income Tax Expense (259) (2,207) (67,224) (69,690)
Profit For The Year 114,361 138,109 120,359 4 5,152 (224,769) 153,216

Segment Assets 1,921,870 728,805 2,315,773 15,455 12,842 424,554 5,419,299
Total Assets 1,921,870 728,805 2,315,773 15,455 12,842 424,554 5,419,299

CalBank
Segment Liabilities 1,797,500 1,304,480 1,362,769 9,045 1,551 164,509 4,639,854

Total Liabilities 1,797,500 1,304,480 1,362,769 9,045 1,551 164,509 4,639,854

Impairment Loss on Financial Assets (28,301) (38,434) - - - - (66,735)
Depreciation and Amortisation 1,354 4,449 - 15 25 5,871 11,714
Expenditure on non-current assets - 6,116 - 10 767 61,336 68,229
69
70
7.0.. Operating segments (Continued)
Corporate
Consumer & Retail Asset
CalBank
Banking & Treasury Brokerage Unallocated Consolidated

Business Banking Management
Project Finance
31 December 2017
External Revenues
Net Interest Income 215,433 102,662 29,835 80 3,022 - 351,032
Net Fees and Commissions 34,743 25,605 1,514 308 5,893 - 68,063
Net Trading Income - - 40,671 - - - 40,671
Other Operating Income 1,324 312 - 830 - - 2,466
Intersegment Revenue (5,716) - - 2,700 3,016 - -
Total Segment Revenues 245,784 128,579 72,020 3,918 11,931 - 462,232
Operating Costs (10,344) (44,894) (24,993) (2,479) (2,915) (157,744) (243,369)
Segment Results 235,440 83,685 47,027 1,439 9,016 (157,744) 218,863
Income Tax Expense - - - (92) (2,705) (63,168) (65,965)
Profit For The Year 235,440 83,685 47,027 1,347 6,311 (220,912) 152,898
Segment Assets 1,465,731 484,988 1,991,528 10,199 18,705 251,987 4,223,138

Total Assets 1,465,731 484,988 1,991,528 10,199 18,705 251,987 4,223,138
Segment Liabilities 891,864 914,923 1,622,653 792 555 120,281 3,551,068

Total Liabilities 891,864 914,923 1,622,653 792 555 120,281 3,551,068
Impairment Loss on Financial Assets (46,356) (8,591) - - - - (54,947)

Depreciation and Amortisation 1,188 2,736 13 20 4,375 8,332
Expenditure on non-current assets 809 1,862 - 419 28 2,978 6,096
CalBank

The Group operated in four geographical markets in Ghana. The following tables show the distribution of operating profit
and assets allocated based on the location of the customers and assets respectively for the years ended 2018 and 2017.
Greater
2018 Northern Ashanti Western Consolidated
Accra
Interest Income 1,329 37,207 46,246 688,488 773,270

Interest Expense (495) (5,067) (13,771) (332,308) (351,641)
Net Interest Income 834 32,140 32,475 356,180 421,629

Net Fees and Commissions 373 6,918 8,925 53,327 69,543
Net Trading Income - - - 27,106 27,106
Other Operating Income 38 285 287 369 979
Operating Income 1,245 39,343 41,687 436,982 519,257

Net Impairement Loss on Financial Assets (79) (4,824) (13,278) (48,554) (66,735)
Personel Expenses (944) (6,335) (4,712) (113,373) (125,364)
Depreciation and Amortisation (221) (1,108) (924) (9,461) (11,714)
Other Expenses (609) (3,137) (2,689) (86,103) (92,538)
Total Operating Expenses (1,853) (15,404) (21,603) (257,491) (296,351)

Profit Before Income Tax (608) 23,939 20,084 179,491 222,906
Income Tax Expense - - - - (69,690)
Profit For The Year (608) 23,939 20,084 179,491 153,216

Segment Assets 14,137 168,956 182,670 5,053,536 5,419,299
Total Assets 14,137 168,956 182,670 5,053,536 5,419,299

Segment Liabilities 26,722 223,710 179,523 4,209,899 4,639,854
Total Liabilities 26,722 223,710 179,523 4,209,899 4,639,854
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Greater
2017 Northern Ashanti Western Consolidated
Accra
Interest Income 33 33,630 48,593 585,872 668,128

Interest Expense (428) (14,321) (7,807) (294,540) (317,096)
Net Interest Income (395) 19,309 40,786 291,332 351,032
Net Fees and Commissions 42 5,733 9,013 53,275 68,063

Net Trading Income - - - 40,671 40,671
Other Operating Income 15 379 476 1,596 2,466
Operating Income (338) 25,421 50,275 386,874 462,232
Net Impairment Loss on Financial Assets (2) 5 (7,919) (47,031) (54,947)

Personnel Expenses (556) (5,730) (4,260) (92,475) (103,021)
Depreciation and Amortisation (131) (987) (811) (6,403) (8,332)
Other Expenses (408) (2,505) (2,346) (71,810) (77,069)
Total Operating Expenses (1,097) (9,217) (15,336) (217,719) (243,369)
Profit Before Income Tax (1,435) 16,204 34,939 169,155 218,863

Income Tax Expense - - - - (65,965)
Profit For The Year (1,435) 16,204 34,939 169,155 152,898
Segment Assets 685 119,862 185,650 3,916,941 4,223,138

Total Assets 685 119,862 185,650 3,916,941 4,223,138
Segment Liabilities 975 189,988 157,749 3,202,356 3,551,068

Total Liabilities 975 189,988 157,749 3,202,356 3,551,068
8.0. FINANCIAL ASSETS AND LIABILITIES

Accounting classifications and fair values
The table below sets out the Group’s classification of each class of financial assets and liabilities. Fair value is the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that
date.
Fair Value
Fair Value Through Amortised Total carrying
2018 Fair value
OCI Profit or cost amount
Loss
The Bank
Cash and Cash Equivalents - - 637,565 637,565 637,565
Investment Securities 276,118 1,523,321 - 1,799,439 1,799,439
Loans and Advances to Customers - - 2,428,002 2,428,002 2,428,002
Investments in Subsidiaries 2,038 - - 2,038 2,038
278,156 1,523,321 3,065,567 4,867,044 4,867,044
Deposits From Banks and Other Financial Institutions - - 78,161 78,161 78,161
Deposits From Customers - - 3,078,682 3,078,682 3,078,682
Borrowings - - 1,319,932 1,319,932 1,319,932
Other Liabilities - - 157,236 157,236 157,236
- - 4,634,011 4,634,011 4,634,011
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8.0. Financial assets and liabilities (Continued) Fair Value
Fair value
2018 OCI Profit or cost amount
Loss
The Group
Investment Securities 276,118 1,539,794 - 1,815,912 1,815,912
276,118 1,539,794 3,060,522 4,876,434 4,876,434
Borrowings - - 1,319,932 1,319,932 1,319,932
- - 4,632,553 4,632,553 4,632,553
Fair Value
Fair value
Loss
The Bank
Invesment Securities 216,942 1,262,211 - 1,479,153 1,479,153
Investments in Subsidiaries 2,038 - - 2,038 2,038
218,980 1,262,211 2,366,050 3,847,241 3,847,241
Borrowings - - 931,816 931,816 931,816
- - 3,563,375 3,563,375 3,563,375
Fair Value
Fair value
Loss
The Group
Invesment Securities 216,942 1,270,023 - 1,486,965 1,486,965
216,942 1,270,023 2,366,050 3,853,015 3,853,015
Borrowings - - 931,816 931,816 931,816
- - 3,549,224 3,549,224 3,549,224
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8.0. Financial assets and liabilities (Continued)
(a) Fair value approximates carrying value due to the (f) Fair value hierarchy
minimal credit losses and short-term nature of the financial
Fair value measurement
assets and liabilities.
The Bank measures fair values using the following fair
(b) Financial instruments at fair value are either priced with
value hierarchy that reflects the significance of the inputs
reference to a quoted market price for that instrument or by
used in making the measurements:
using a valuation model. Where the fair value is calculated
using a valuation model, the methodology is to calculate • Level 1: Quoted market price (unadjusted) in an active
the expected cash flows under the terms of each specific market for an identical instrument.
contract and then discount these values back to a present
value. The expected cash flows for each contract are • Level 2: Valuation techniques based on observable
determined either directly by reference to actual cash flows inputs, either directly (i.e., as prices) or indirectly (i.e.,
implicit in observable market prices or through modelling derived from prices). This category includes instruments
cash flows using appropriate financial-markets pricing valued using quoted market prices in active markets for
models. Wherever possible these models use as their basis similar instruments; quoted prices for identical or similar
observable market prices and rates including, for example, instruments in markets that are considered less than active;
interest rate yield curves, equities and commodities prices, or other valuation techniques where all significant inputs
option volatilities and currency rates. are directly or indirectly observable from market data.
(c) The fair value for loans and advances, and other • Level 3: Valuation techniques using significant
lending is estimated using discounted cash flows, applying unobservable inputs. This category includes all instruments
either market rates where practicable or, where the where the valuation technique includes inputs not based
counterparty is a bank, rates currently offered by other on observable data and the unobservable inputs have
financial institutions for placings with similar characteristics. a significant effect on the instrument’s valuation. This
In certain cases the fair value approximates carrying value category includes instruments that are valued based on
because the instruments are short term in nature or reprice quoted prices for similar instruments where significant
frequently. unobservable adjustments or assumptions are required to
reflect differences between the instruments.
(d) Fair values of deposit liabilities payable on demand
(interest free, interest bearing and savings deposits) The determination of fair values of quoted financial
approximate to their carrying value. The fair value assets and financial liabilities in active markets are based
of all other deposits and other borrowings (including on quoted market prices or dealer price quotations. If
repurchase agreements and cash collateral on securities the market for a financial asset or financial liability is not
lent) is estimated using discounted cash flows, applying actively traded, the Bank establishes fair value by using
either market rates, where practicable, or rates currently valuation techniques. These techniques include the use of
offered by the Group for deposits of similar remaining arms’ length transactions, discounted cash flow analysis,
maturities. and valuation models and techniques commonly used by
market participants.
(e) Fair values of short-term debt securities in issue are
approximately equal to their carrying amount. Fair values
of other debt securities in issue are based on quoted
prices where available, or where these are unavailable, are
estimated using other valuation techniques.
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8.0. Financial assets and liabilities (Continued)
The table below analyses financial instruments measured at fair value at the end of the reporting period by the level in fair
value hierarchy, into which the fair value measurement is categorised.
The Level 1 was valued using the Bank of Ghana quoted bid prices.
The Level 2 was valued using Government of Ghana quoted market prices for similar instruments.
Level 3 - valuation techniques are based on significant observable inputs
2018 2017
The Bank Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Investment Securities 275,983 1,523,456 - 1,799,439 216,936 1,262,217 - 1,479,153

275,983 1,523,456 - 1,799,439 216,936 1,262,217 - 1,479,153

The Group
Investment Securities 275,983 1,539,929 - 1,815,912 216,936 1,270,029 - 1,486,965
275,983 1,539,929 - 1,815,912 216,936 1 ,270,029 - 1 ,486,965
9.0. NET INTEREST INCOME

2018 2017
INTEREST INCOME
Cash and Cash Equivalents 19,280 19,280 21,186 21,186
Loans and Advances to Customers 477,203 477,203 454,839 454,838
Investment securities at amortised cost 233,536 234,055 156,893 156,967
Investment securities at FVOCI (2017: available-for-sale) 42,732 42,732 35,137 35,137
Total interest income calculated using the effective
interest method 772,751 773,270 668,055 668,128

INTEREST EXPENSE
Deposits from Banks 11,927 12,100 40,603 34,881
Deposits from Customers 257,946 252,652 240,789 240,789
Debt Securities Issued 86,889 86,889 41,426 41,426
Total Interest Expense 356,762 351,641 322,818 317,096
Included within various line items under interest income for the year ended 31 December 2018 is a total of GH¢15.84
million (2017: GH¢12.40 million) accrued on impaired financial assets.

“The amounts reported above include interest income and expense, calculated using the effective
interest method, that relate to the following financial assets and financial liabilities.”

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9.0. Net Interest Income (Continued)

2018 2017
Financial assets measured at amortised cost 4,576,524 4,587,952 3,633,064 3,640,876
Financial assets measured at FVOCI (2017: available-for-sale) 278,225 278,225 212,139 212,139
Total 4,854,749 4,866,177 3,845,203 3,853,015

Financial liabilities measured at amortised cost 4,476,775 4,469,985 3,444,930 3,429,439
10.0. NET FEE AND COMMISSION INCOME

2018 2017
Bank Group Bank

Fee and Commission Income
Customer Fees 8,889 8,889 11,026 11,026
Credit Related Fees 42,378 42,378 32,636 32,630
Corp Finance & Advisory Fees 5,726 13,332 9,570 18,743
Other 11,389 11,389 10,586 10,586
Total Fee and Commission Income 68,382 75,988 63,818 72,985

Fee and Commission Expense
Inter-bank transaction fees 6,194 6,194 4,887 4,922
Other fees and commission expense 251 251 - -
Total Fee and Commission Expense 6,445 6,445 4,887 4,922

Net Fee and Commission Income 61,937 69,543 58,931 68,063
11.0. NET TRADING INCOME

2018 2017
Fixed Income 32 32 3,009 3,009

Foreign Exchange 26,886 26,902 37,662 37,662
Equities held-for-trading - 172 - -
Net Trading Income 26,918 27,106 40,671 40,671
12.0. OTHER OPERATING INCOME

2018 2017
Rental Income 108 108 - -

Profit From disposal of Property Plant and Equipment 203 203 - -
Other Income 318 636 1,457 2,418
Dividend Income 15,026 32 13 48
15,655 979 1,470 2,466
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13.0. PERSONNEL EXPENSES

2018 2017
Salaries 59,446 60,972 53,142 55,652

Defined Contribution Plans 6,860 7,081 5,849 6,051
Other Personnel Expenses 56,002 57,311 41,264 41,318
122,308 125,364 100,255 103,021
Included in personnel expenses for the year is a total of GH¢4.8 million (2017: GH¢9.5 million) relating to executives,
inclusive of defined benefit contribution based on the fair value measurement (actuarial valuation) of the plan.
The average number of persons employed by the bank during the year was 792 (2017: 802)
14.0. OTHER EXPENSES

2018 2017
Software Licensing and Other Information Technology Cost 17,160 17,490 13,363 13,836
Auditors’ Remuneration 269 316 210 250
Directors Fees & Allowances 1,556 1,675 1,179 1,241
Other Expenses 70,444 73,057 59,718 61,742
89,429 92,538 74,470 77,069
(a) Other expenses includes premise rent, communications, insurance, computer cost, printing & stationery, fuel &
lubricants, and outsource costs

(b) Social Responsibility
Amount spent on fulfilling social responsibility obligations was GH¢482,000 (2017: GH¢779,787).

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15. INCOME TAX EXPENSE

Recognised in the statement of comprehensive income
2018 2017
Note Bank Group Bank Group
Income tax expense
Current tax expense 23 65,878 68,347 74,757 77,533
Deferred tax expense 24 1,535 1,343 (11,586) (11,568)
Total income tax expense 67,413 69,690 63,171 65,965
Reconciliation of effective tax rate
Profit before tax 230,353 222,906 208,337 218,863
Corporate Tax Rate 25% 25% 25% 25%

National Fiscal Stabilisation Levy Rate 5% 5% 5% 5%
Income tax using the domestic tax rate 57,588 55,727 52,084 54,715
Non-deductible expenses 36,387 40,857 4,957 4,612
Tax at different rate 30 30 - -
Capital allowances (38,110) (38,069) (5,104) (5,122)
National fiscal and stabilisation levy 11,518 11,145 10,417 10,943
Prior year tax adjustments - - 817 817
Current income tax charge 67,413 69,690 63,171 65,965

Effective tax rate 29.3% 31.3% 30.3% 30.1%
16. EARNINGS PER SHARE

Basic earnings per share
The calculation of basic earnings per share for the group as at 31 December 2018 was based on the profit attributable to
ordinary shareholders of GH¢158.2 million (2017: GH¢152.9 million) and a weighted average number of ordinary shares
outstanding of 626 million (2017: 547 million), calculated as follows:
2018 2017

Net profit for the year attributable to equity holders of the Bank 162,940 153,216 145,166 152,898

Weighted average number of ordinary shares

Issued ordinary shares at 1 January 548,262 548,262 548,262 548,262
Effect of treasury shares held by subsidiaries - (997) - (819)
Bonus shares issued during the year 78,323 78,323 - -
Weighted average number of ordinary shares at 31 December 626,585 625,588 548,262 547,443

Basic earnings per share (GHS) 0.2600 0.2449 0.2648 0.2793
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16. Earnings Per Share (Continued)

There was no additional shares issued for cash during the year.
Diluted earnings per share

The calculation of diluted earnings per share as at 31 December 2018 was based on the profit attributable to ordinary
shareholders of GH¢155.85 million (2017: GH¢152.90 million) and a weighted average number of ordinary shares
outstanding after adjustment for the effects of all dilutive potential ordinary shares of 625.6 million (2017: 547.4 million),
calculated as follows:
2018 2017

Profit for the year attributable to ordinary shareholders 162,940 153,216 145,166 152,898

Weighted average number of ordinary shares (diluted)

Weighted average number of ordinary shares (basic) 548,262 548,262 548,262 548,262
Effect of treasury shares held by subsidiaries - (997) - (819)
Bonus shares issued during the year 78,323 78,323 - -
Weighted average number of ordinary shares (diluted) 626,585 625,588 548,262 547,443
Diluted earnings per share (GHS) 0.2600 0.2449 0.2648 0.2793
17. DIVIDEND PER SHARE

The Directors recommend the payment of a dividend of GH¢0.048 per share. There was no dividend payment in
respect of the year ended 2017.

18. CASH AND CASH EQUIVALENTS

2018 2017
Cash and Balance with Banks 132,672 132,677 183,172 183,172
Unrestricted Balances with Bank of Ghana 169,704 170,383 59,955 61,504
Restricted Balances with Bank of Ghana 315,684 315,005 251,311 249,762
Items in course of collection 19,505 19,505 17,938 17,938
637,565 637,570 512,376 512,376
Mandatory reserve deposits representing 10% of the bank total deposit are not available for use in the bank’s day to day
operations and are non-interest bearing.
19. INVESTMENT SECURITIES

2018 2017
Amortised cost (Held to Maturity) 1,523,321 1,539,794 1,262,211 1,270,023
FVOCI (Available for Sale) 276,118 276,118 216,942 216,942
1,799,439 1,815,912 1,479,153 1,486,965
A. Securities at Amortised Cost (Held to Maturity)

Money Market Placements 685,300 692,461 867,904 870,562
Treasury Bills 385,217 385,217 341,479 341,947
Government Notes 452,804 457,826 52,828 52,828
Equities - 4,290 - 4,686
1,523,321 1,539,794 1,262,211 1,270,023
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19. Investment Securities Continued)

2018 2017
B. Securities at FVOCI (Available for sale)
Government Bonds 275,983 275,983 216,936 216,936
Equities 135 135 6 6
276,118 276,118 216,942 216,942
A total of GHS 60.3 million (2017: GH¢ 77.1 million) of Investment Securities have been used as security for interbank
and short term borrowing.
20. LOANS AND ADVANCES TO CUSTOMERS

(a) Analysis by portfolio 2018 2017
Retail:
Mortgage 41,393 41,393 45,733 45,733
Personal Loans 47,801 47,801 43,955 43,955
SME 356,233 356,233 304,544 304,544
Retail Gross Loans and Advances 445,427 445,427 394,232 394,232
Corporate:
Financial Institutions 257,796 252,746 236,954 236,954
Other Secured 1,899,027 1,899,027 1,376,586 1,376,586
Corporate Gross Loans and Advances 2,156,823 2,151,773 1,613,540 1,613,540
Gross Loans and Advances 2,602,250 2,597,200 2,007,772 2,007,772

Less:
Identified Impairment - Corporate (153,291) (153,291) (144,354) (144,354)
Identified Impairment - Retail - - (5,358) (5,358)
Unidentified Impairment - Corporate (12,572) (12,572) (3,456) (3,456)
Unidentified Impairment - Retail (8,385) (8,385) (930) (930)
Carrying Amount 2,428,002 2,422,952 1,853,674 1,853,674
(b) Analysis by type
Overdrafts 497,417 492,367 535,109 535,109

Term Loans 2,104,833 2,104,833 1,472,663 1,472,663
Gross Loans and Advances 2,602,250 2,597,200 2,007,772 2,007,772
Less:
Identified Impairment (153,291) (153,291) (149,712) (149,712)
Unidentified Impairment (20,957) (20,957) (4,386) (4,386)
Carrying Amount 2,428,002 2,422,952 1,853,674 1,853,674
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i. The above constitute loans and advances (including credit iv. Fifty (50) largest exposures (gross funded and non-
bills negotiated) to customers and staff. funded) to total exposures is 78.6% (2017: 77.6%).

ii. Loan loss provision ratio is 6.7%of gross advances (2017: v. The maximum amount due from officers of the bank
7.7%). during the year amounted to GH¢26.63 million (2017:
GH¢25.69 million).
iii. Gross Non-performing loans ratio per Bank of Ghana
requirement is 8.0% (2017: 10.9%). Loans and advances are carried at amortised cost. There
were no loans carried at fair value through profit or loss
2018 2017
Allowances for Identified Impairment Bank Group Bank Group
Balance at 1 January 149,712 149,712 96,399 96,399
Impairment Charge for the year 71,130 71,130 72,038 72,038
Write-offs (67,551) (67,551) (18,725) (18,725)
Balance at 31 December 153,291 153,291 149,712 149,712
Allowances for Unidentified Impairment

IFRS 9 Impact 17,086 17,086 - -
Impairment Charge for the year 311 311 (263) (263)
Write-offs (826) (826) - -

Credit Loss Expense
Net increase/(decrease) in impairments 72,802 72,802 71,775 71,775
Amounts recovered previously written off (6,067) (6,067) (16,828) (16,828)
Net charge to the statement of comprehensive income 66,735 66,735 54,947 54,947
21. INVESTMENTS IN SUBSIDIARIES
(a) The Principal Subsidiaries are:

Country of
Amounts Percentage
Name Nature of Business Incorporation
2018 Invested Interest
CalBank Nominees Limited (CBNL) Custodial Service Ghana 10 100
CalBrokers Limited (CBL) Security Brokerage Ghana 1,500 100
CalAsset Management Limited (CAML) Fund Management Ghana 518 100
CalTrustee Company Limited (CTCL) Trustee Ghana 10 100
2,038
Country of
Amounts Percentage
Name Nature of Business Incorporation
Invested Interest
2017
CalBank Nominees Limited (CBNL) Custodial Service Ghana 10 100
CalBrokers Limited (CBL) Security Brokerage Ghana 1,500 100
CalAsset Management Limited (CAML) Fund Management Ghana 518 100
CalTrustee Company Limited (CTCL) Trustee Ghana 10 100
2,038
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21. Investments in Subsidiaries (Continued)
2018 2017
Investments in subsidiaries are stated at cost and comprise:
Investments in Subsidiaries 2,038 - 2,038 -
(b) Summary of Subsidiary Accounts
2018
CBL CAML CBNL CTCL
Revenue 3,778 10,145 - -
Expenses (3,515) (2,786) - -
Income Tax and National Fiscal Stabilization Levy (259) (2,207) - -
Profit (Loss) for the year 4 5,152 - -

Total Assets 15,455 12,842 10 10
Total Liabilities 9,045 1,551 - -
Total Shareholder’s Equity 6,410 11,291 10 10
Total Cash Inflows 20,072 124,956 10 10
Total Cash Outflows (19,063) (131,276) - -
Net Cash Inflow (Outflow) 1,009 (6,320) 10 10
2017
CBL CAML CBNL CTCL
Revenue 3,918 11,931 - -
Expenses (2,479) (2,915) - -
Income Tax and National Fiscal Stabilization Levy (92) (2,705) - -
Profit (Loss) for the year 1,347 6,311 - -
Total Assets 10,199 18,705 10 10

Total Liabilities 792 555 - -
Total Shareholder’s Equity 9,407 18,150 10 10
Total Cash Inflows 19,518 127,972 10 10
Total Cash Outflows (21,281) (121,987) - -
Net Cash Inflow (Outflow) (1,763) 5,985 10 10
22. OTHER ASSETS

2018 2017
Prepayments 64,625 67,174 32,867 32,950
Sundry Debtors 3,902 3,889 18,172 22,135
68,527 71,063 51,039 55,085
Sundry debtors includes receivables from Money Transfer Operations and Mobile Money Operations
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The Bank
23. CURRENT TAX ASSETS/LIABILITIES

(Payments)/
Balance Charge for Balance
Refund During
1/1/2018 the year 31/12/2018
the year
Income Tax
Up to 2017 1,437 (1,437) - -
2018 - (48,118) 54,360 6,242
1,437 (49,555) 54,360 6,242

National Fiscal Stabilisation Levy
Up to 2017 399 (399) - -
2018 - (10,487) 11,518 1,031
399 (10,886) 11,518 1,031

Total 1,836 (60,441) 65,878 7,273
The Group
(Payments)/
Balance Charge for Balance
Refund During
1/1/2018 the year 31/12/2018
Income Tax the year
2009 - 2017 227 (1,437) - (1,210)
2018 - (50,471) 56,830 6,359
227 (51,908) 56,830 5,149
Dividend Tax
2018 - - - -
National Fiscal Stabilisation Levy

2009 - 2017 1,009 (399) - 610
2018 - (10,487) 11,518 1,031
1,009 (10,886) 11,518 1,641
Total 1,236 (62,794) 68,347 6,789
Liabilities up to and including 2017 for the Bank has been agreed with the tax authorities, liabilities up to and including
2009 for the subsidiaries have also been agreed. All liabilities are subject to agreement with the Ghana Revenue Authority.
24. DEFERRED TAXATION

2018 2017
Balance at the beginning (17,706) (17,698) (6,007) (6,017)
Origination/reversal of temporary differences:
recognised in statement of profit or loss 1,535 1,343 (11,586) (11,568)
recognised in OCI 1,280 1,280 (113) (113)
Balance at the end (14,891) (15,075) (17,706) (17,698)
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24. Deferred Taxation (Continued)
Recognised deferred tax assets and liabilites:

Deferred tax liabilities are attributable to the following:
2018 Bank Group
Assets Liabilities Net Assets Liabilities Net
Property and Equipment - 27,506 27,506 - 27,507 27,507

Impairment Allowance (43,903) - (43,903) (44,088) - (44,088)
Others - 1,506 1,506 - 1,506 1,506
Net tax (assets)/liabilities (43,903) 29,012 (14,891) (44,088) 29,013 (15,075)
Recognised deferred tax assets and liabilites:

Deferred tax liabilities are attributable to the following:
2017 Bank Group

Assets Liabilities Net Assets Liabilities Net
Property and Equipment - 20,590 20,590 9 20,590 20,599
Impairment Allowance (38,522) - (38,522) (38,522) - (38,522)
Others - 226 226 - 225 225
Net tax (assets)/liabilities (38,522) 20,816 (17,706) (38,513) 20,815 (17,698)
Deferred tax arising from the revaluation of landed properties have been recognised directly in equity.
Reversals of temporary differences attributable to this deferred tax liability are also recognised directly in equity
25. PROPERTY AND EQUIPMENT
The Bank

2018 Furniture,
Bank Motor Work in
Fixtures & Total
Premises Vehicles Progress
Equipment
Cost
Balance at 1 January 116,693 52,217 8,180 133,185 310,275
Additions 24,060 3,396 620 139,538 167,614
Disposals - - (1,292) - (1,292)
Transfers 107,714 35,027 - (144,015) (1,274)
Balance at 31 December 248,467 90,640 7,508 128,708 475,323

Accumulated Depreciation
Balance at 1 January 4,589 22,612 4,344 - 31,545
Charge for the year 1,918 6,594 1,046 - 9,558
Released on Disposal - - (1,273) - (1,273)

Balance at 31 December 6,507 29,206 4,117 - 39,830

Net Book Value
At 31 December 241,960 61,434 3,391 128,708 435,493
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25. Property and Equipment (Continued)
The Group
2018 Furniture,
Bank Motor Work in
Fixtures & Total
Cost Equipment
Balance at 1 January 116,693 53,064 8,180 133,185 311,122
Additions 24,060 3,441 620 139,538 167,659
Disposals - - (1,292) - (1,292)
Transfers 107,714 35,027 - (144,015) (1,274)
Balance at 31 December 248,467 91,532 7,508 128,708 476,215

Balance at 1 January 4,589 23,376 4,342 - 32,307
Charge for the year 1,918 6,631 1,049 - 9,598
Released on Disposal - - (1,273) - (1,273)

Balance at 31 December 6,507 30,007 4,118 - 40,632

Net Book Value
At 31 December 241,960 61,525 3,390 128,708 435,583
The Bank

2017 Furniture,
Bank Motor Work in
Fixtures & Total
Equipment
Cost
Balance at the Beginning 97,017 35,334 6,678 137,766 276,795
Additions - 2,960 1,502 29,018 33,480
Transfers 19,676 13,923 - (33,599) -
Balance at the end 116,693 52,217 8,180 133,185 310,275
Balance at the Beginning 3,134 18,056 3,377 - 24,567
Charge for the year 1,455 4,556 967 - 6,978
Balance at the end 4,589 22,612 4,344 - 31,545
Net Book Value 112,104 29,605 3,836 133,185 278,730
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The Group
2017 Furniture,
Bank Motor Work in
Fixtures & Total
Equipment
Cost
Balance at the Beginning 97,017 36,173 6,678 137,766 277,634
Additions - 2,968 1,502 29,013 33,488
Transfers 19,676 13,923 - (33,599) -
Balance at the end 116,693 53,064 8,180 133,180 311,122
Balance at the Beginning 3,134 18,788 3,375 - 25,302
Charge for the year 1,455 4,588 967 - 7,010
Balance at the end 4,589 23,376 4,342 - 32,312
Net Book Value 112,104 29,688 3,838 133,180 278,810
The Group’s leasehold Land and Buildings are stated at The fair value of the leasehold land and buildings was
their revalued amounts, being the fair value at the date of determined based on the market comparable approach that
revaluation, less any subsequent accumulated depreciation reflects recent transaction prices for similar properties. The
and subsequent accumulated impairment losses. The fair fair value of the buildings was determined using the cost
value measurements of the Group’s leasehold land and approach that reflects the cost to a market participant to
buildings as at 31 December 2016 was performed by Messrs construct assets of comparable utility and age, adjusted for
Apex Valuation, Surveying & Property Consult and Assenta obsolescence. There has been no change to the valuation
Property Consulting. Messrs Apex Valuation, Surveying technique during the year.
& Property Consult and Assenta Property Consulting are
None of the assets of the bank has been used as security
Chartered Surveyors, members of the Ghana Institute of
for any loan.
Surveyors and they have the appropriate qualifications and
experience in the fair value measurement of properties in
the relevant locations.
The Bank The Group

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
2018
Bank Premises - 241,961 - 241,961 - 241,960 - 241,960
- 241,961 - 241,961 - 241,960 - 241,960
2017
Bank Premises - 112,104 - 112,104 - 112,104 - 112,104
- 112,104 - 112,104 - 112,104 - 112,104
There was no transfer between different levels of hierarchy during the year.
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Disposal of Property and Equipment

Profit on disposal of property and equipment has been arrived at as follows:
2018 2017
Cost 1,292 1,292 - -
Accumulated Depreciation 1,273 1,273 - -
Net Book Value 19 19 - -

Disposal Proceeds 222 222 - -
Profit on Disposals 203 203 - -
26. INTANGIBLE ASSETS

Purchased Software 2018 2017
Cost
Acquisitions 1,957 1,957 11,631 11,631
Work in progress 2,138 2,869 - -
Amortisation
Charge for the year 2,116 2,116 1,322 1,322
Carrying Amounts 19,901 20,632 17,922 17,922
27. CUSTOMER DEPOSITS 2018 2017

Analysis by product
Current Account 1,689,452 1,689,452 897,740 897,740
Time Deposits 1,200,578 1,200,578 1,391,384 1,391,384
Savings deposits 188,652 188,652 139,077 139,077
3,078,682 3,078,682 2,428,201 2,428,201
Analysis by portfolio
Retail
Current Account 448,946 448,946 367,442 367,442
Time Deposits 531,503 531,503 409,625 409,625
Savings deposits 186,842 186,842 137,856 137,856
1,167,291 1,167,291 914,923 914,923
Corporate
Current Account 1,240,506 1,240,506 530,298 530,298
Time Deposits 669,075 669,075 982,413 982,413
Savings deposits 1,810 1,810 567 567
1,911,391 1,911,391 1,513,278 1,513,278
3,078,682 3,078,682 2,428,201 2,428,201

Analysis by type
Individual and other private enterprise 2,292,570 2,292,570 2,253,993 2,253,993
Public enterprises 786,112 786,112 174,208 174,208
3,078,682 3,078,682 2,428,201 2,428,201
Twenty largest depositors to total deposit ratio is 24% (2017: 33%).
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28. DEPOSITS FROM BANKS AND OTHER FINANCIAL INSTITUTIONS

2018 2017
Current Account 25,918 21,570 35,449 35,449

Time Deposit 52,243 49,801 49,464 33,973
78,161 71,371 84,913 69,422
29. BORROWINGS
2018 2017
Long-term borrowings
CitiBank New York 8,033 8,033 36,797 36,797
Finfund 43,380 43,380 - -
Ghana Export - Import Bank 41,124 41,124 5,930 5,930
GIB London 8,033 8,033 36,797 36,797
International Finance Corporation 216,900 216,900 49,676 49,676
PROPACO 108,450 108,450 - -
Norfund 28,920 28,920 - -
The OPEC Fund for International Development (OFID) 11,123 11,123 16,983 16,983
465,963 465,963 146,183 146,183
Subordinated-term borrowings
PROPACO 141,082 141,082 128,826 128,826
141,082 141,082 128,826 128,826
Short-term borrowings
CitiBank New York 32,730 32,730 30,251 30,251
Finfund 30,897 30,897 - -
Ghana Export - Import Bank - - 39,906 39,906
Gib London 32,527 32,527 65,351 65,351
International Finance Corporation 79,191 79,191 16,752 16,752
Kassardjian Armen - - 14,734 14,734
Norfund 19,460 19,460 - -
PROPACO 37,165 37,165 8,139 8,139
SSNIT 84,163 84,163 75,611 75,611
Stanchart London 170,213 170,213 398,851 398,851
Standard Chartered Bank - Accra 218,732 218,732 - -
The OPEC Fund for International Development (OFID) 7,809 7,809 7,212 7,212
712,887 712,887 656,807 656,807

Carrying Amount 1,319,932 1,319,932 931,816 931,816
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29. Borrowings (continued)
CitiBank - This is a trade finance line of credit granted The OPEC Fund for International Development
in 2014 to be exclusively used to finance eligible SME (OFID) - This is a trade finance line of credit granted to
transactions. Interest is set at 3 months Libor plus 3.1% per be exclusively used to finance eligible trade transactions.
annum maturing in January 2020. Interest rate is set at 6 months BBA Libor plus 4.0% per
annum maturing in 2021.
Ghana Export and Import Bank – These are various
facilities granted by the Ghana Export and Import Bank to Kassardjian Armen - This is a facility granted by
be extended to operators in the export sector. Interest is at Kassardjian Armen for on-lending. Interest was at a rate
a rate of 2.5% per annum. of 20.0% and matured in January 2018.
Ghana International Bank – These are two facilities SSNIT – These are several intra-day and short-term
granted for on-lending to the private sector and general facilities with maturity periods of up to one year. Interest
corporate purposes. Interest is at a rate of 3 months US rate is tied to the respective treasury bill/note rates ruling
Libor plus 5.2% per annum maturing in 2020 and 3 months on the day of borrowing. The weighted average interest
Libor plus 2.9% per annum which matured in 2018. rate on these facilities is 16.3% (2017: 16.7%).
International Finance Corporation – These facilities Standard Chartered Bank London – These are three
were granted in 2017 and 2018 to be used to finance short-term facilities with maturity periods up to 6 months
SME transactions. Interest rate is 6 months Libor plus up with a final maturity in June 2019. Interest rate is USD
to 5.0% per annum maturing in 2021 and 2022. Libor plus 3.0% per annum.
Proparco (Subordinated Term Loan) - This is a Tier Finfund - This is a facility granted by Finfund for on-
2 facility granted by Proparco, interest is at a rate of 6 lending to SME’s interest is at a rate of 6 months Libor
months Libor plus 5.8% per annum maturing in September plus 5.0% per annum and matures in August 2021.
2024.
Norfund - This is a facility granted by Norfund for on-
Proparco - This is a facility granted for on-lending to the lending to SME’s interest is at a rate of 6 months Libor
private sector and expiring in November 2022. Interest is plus 5.0% per annum and matures in May 2021.
at a rate of 6 months US Libor plus 4.4% per annum.
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30. OTHER LIABILITIES

2018 2017
Creditors 56,987 58,559 30,208 31,158
Accruals 35,405 35,851 16,836 16,809
Recognised liability for Other Long-term Employee Benefit 32,399 32,453 34,541 34,587
Short-Term Employee benefits 343 408 94 94
Other liabilities 32,102 35,297 36,766 37,137
157,236 162,568 118,445 119,785
(a) Movement in the liability for defined benefit obligations

Liability for defined benefit obligations at 1 January 34,541 34,587 29,633 29,705
Benefits paid by the plan (2,626) (2,626) (487) (514)
Expense charged to comprehensive income 484 492 5,395 5,396
Liability for defined benefit obligations at 31 December 32,399 32,453 34,541 34,587
Expenses recognised in profit or loss

Experience gains and losses 462 442 (72) (99)
Net actuarial losses/profits recognised during the year (137) (142) - -
Current service costs (132) (110) 5,205 5,221
Interest on obligation 291 302 262 274
484 492 5,395 5,396
Amounts related to executives included in the

liability for defined benefit obligations 30,248 30,248 32,837 32,837
Actuarial assumptions
Principal assumptions at the reporting date (expressed in weighted averages)
2018 2017
Discount rate at 31 December 21.5% 21.5% 18.0% 18.0%
Future salary increases 15.0% 15.0% 15.0% 15.0%
Inflation rate 9.5% 9.5% 11.6% 11.6%
Assumptions regarding future mortality based on published statistics and mortality tables 1983 Unisex Group Annuity
mortality.
The sensitivity analysis as at the year end for the Bank and Group is as follows:
Investment Investment Salary scale Salary scale Mortality

2018 Main Basis
return (2%) return 2% (2%) 2% (20%)
Actuarial Liability 29,954 1,829 1,676 1,671 1,832 1,746
Percentage Change n/a -94% -94% -94% -94% -94%
2017 Investment Investment Salary scale Salary scale Mortality

Main Basis
return (2%) return 2% (2%) 2% (20%)
Actuarial Liability 34,587 1,829 1,676 1,671 1,832 1,746
Percentage Change n/a 5% (4%) (4%) 5% 0%
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30. Other Liabilities (continued)

The Groups long term employee benefit is valued every year. The fair value measurement of the Group’s long term
employee benefit as at the year end 2018 was performed by Messrs Stallion Consultants Limited and signed by its
Executive Chairman Mr. Charles Osei-Akoto, (ASA,MAAA). Stallion Consultants Limited has the appropriate qualification
and experience in the fair value measurement of defined benefit.
31. CAPITAL AND RESERVES

a. Stated Capital

2018 2017

Number Number
Value Value
Authorised: (‘000) (‘000)
Ordinary shares of no par value 2,000,000 1,000,000

Issued:
For cash 414,871 93,305 414,871 93,305
Transfer from Retained Earnings - 228,375 - 6,695
Bonus issue 211,714 78,320 133,391 -

626,585 400,000 548,262 100,000
There is no call or installment unpaid on any share.

At the year end 2018 the authorised share capital comprised 2 billion ordinary shares (2017: 1 billion) of no par value. All
issued shares are fully paid for.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Bank. All shares rank equally with regard to the Bank’s residual assets.
b. Statutory Reserve Fund

2018 2017
Balance at the beginning 163,312 163,312 145,166 145,166
Transfer from Income Surplus 81,470 81,470 18,146 18,146

Balance at the year end 244,782 244,782 163,312 163,312
Statutory reserve represents the cumulative amounts set aside from annual net profit after tax as required by Section 34
of the Banks and Specialised Deposit Taking Institution Act 2016 (Act 930).
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31. Capital And Reserves (Continued)
c. Revaluation Surplus
2018 2017
At 1 January 63,526 63,526 63,413 63,413
Deferred Tax on Revaluation (1,280) (1,280) 113 113

At 31 December 62,246 62,246 63,526 63,526
This refers to the effects from the fair value measurement after deduction of deferred taxes on unrealised surplus/gains
on non financial assets. These unrealised gains or losses are not recognised in profit or loss until the asset has been sold/
matured or impaired. Deferred tax on revaluation of the Bank’s leasehold land and buildings is recognised directly in Other
Comprehensive Income (OCI).
d. Regulatory credit risk reserve
2018 2017
Specific Provision on Loans and Advances 165,412 165,412 184,509 184,509
General Provision on Loans and Advances 23,467 23,467 17,786 17,786
General Provision on Contingent Liabilities 2,773 2,773 3,672 3,672
Impairment Loss per Bank of Ghana requirment 191,652 191,652 205,967 205,967
Impairment Loss per IFRS requirement (175,610) (175,610) (154,098) (154,098)
Credit Risk Reserve 16,042 16,042 51,869 51,869
The regulatory credit risk reserve is a non-distributable reserve prescribed by Bank of Ghana to account for differences
between impairment loss on financial assets per IFRS and the specific and general impairment loss on loans and advances
and contingent liabilities per the Central Bank’s prudential guidelines.
e. Other reserves
i. Fair value reserve
2018 2017
Balance 1 January (7,163) (7,252) (6,543) (6,648)
Changes in FVOCI financial assets (9,013) (9,013) 36 36
Changes in defined benefit liability (462) (442) (656) (640)

Balance 31 December (16,638) (16,707) (7,163) (7,252)
ii. Treasury Shares Bank Group Bank Group

Balance 1 January - (518) - (678)
Net Changes in Bank’s shares held by subsidiary - (66) - 160
Total at 31 December - (584) - (518)
These are shares held by the subsidiaries as part of their trading portfolio. The subsidiaries at the end of the period held
as part of their trading stock 996,865 (2017: 818,857) CalBank shares
f. Dividends

The Directors recommend the payment of a dividend of GH¢0.048 per share.

Net assets per share is based on 626.6 million (2017: 548.3 million) ordinary shares at the statement of financial position date.
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32. CONTINGENCIES AND

COMMITMENTS The amount of unsecured contingencies and commitments
in respect of these at 31 December 2018 was GH¢0.0
(a) Letters of Credit, Guarantees and Indemnities million (2017: GH¢0.0 million).
In common with banks, the group conducts business
involving acceptances, guarantees, performance bonds and (b) Capital Expenditure
indemnities. Capital commitments not provided for in the financial
statements as at 31 December 2018 was nil (2017: 51
The majority of these facilities are offset by corresponding million).
obligations of third parties. The group also holds certain
securities in its own name on behalf of customers. The (c )Pending Legal Claims
values of these securities are not recognised in the At the year end there were two legal cases pending against
consolidated statement of financial position. the bank. Should judgment go in favour of the plaintiffs,
likely claims against the bank have been estimated at
Letters of credit commit the group to make payments GH¢7.4 milliom (2017: GH¢6.7 million). No provisions have
to third parties, on production of documents, which are been made in the financial statements in respect of these
subsequently reimbursed by customers. amounts.

Guarantees are generally written by a bank to support (d) Assets under management and Custody
performance by a customer to third parties. The group will The group provides custody, trustee, investment
only be required to meet these obligations in the event of management and advisory services to third parties, which
customer’s default. involves the group making allocation and purchase and sale
decisions in relation to a wide range of financial instruments.
Contingencies and commitments not provided for in the Those assets that are held in a fiduciary capacity are not
financial statements as at 31 December 2018 in respect of included in these financial statements.
the above amounted to GH¢277.3 million (2017: GH¢367.2
million) , as detailed below: Assets managed by the Group on behalf of clients amounted
2018 2017 to GH¢908.2 million (2017: GH¢880.6 million).
Letters of Credit 108,984 127,117
Guarantees and Indemnities 168,337 240,037 Assets under custody amounted to GH¢1.46 billion
277,321 367,154 (2017:GH¢1.20 billion).
Those assets that are held in a fiduciary capacity are not

included in these financial statements.
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33. RELATED PARTY TRANSACTIONS In the ordinary course of business, the Group makes
loans to companies where a Director or other member
Related party transactions of Key Management Personnel (or any connected person)
Parties are considered to be related if one party has the is also a Director or other member Key Management
ability to control the other party or exercise significant Personnel (or any connected person) of Cal Bank Limited.
influence over the other party in making financial or These loans are made on substantially the same criteria
operating decisions, or one other party controls both. and terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions
Subsidiaries with other persons and did not involve more than the
Details of principal subsidiaries are shown in Note 21. normal risk of collectibility or present other unfavourable
features.
Transactions with Directors and Key Management Details of transactions between related parties and the
Personnel Group are as follows:
Key Management Personnel are defined as those persons
having authority and responsibility for planning, directing Details of lending to related parties are as follows:
and controlling the activities of Cal Bank Limited (directly
or indirectly) and comprise the Directors and Officers of
Cal Bank Limited.
Loans and Advances to Directors and Their Associates 2018 2017

Balance at 1 January 1,126 1,750
Loans Advanced During the Year - -
Loans Repayments Received During the Year (842) (624)
Balance at 31 December 284 1,126

Loans and Advances to Employees
Balance at 1 January 25,602 22,530
Loans Advanced During the Year 12,091 8,756
Loans Repayments Received During the Year (7,782) (5,684)
Balance at 31 December 29,911 25,602
There were no loans and advances granted to companies in which Directors have an interests at the end of the year.
(2017: GH¢0.27 million)
No specific provisions have been recognised in respect of loans to Directors or other members of Key Management
Personnel or any connected person.

Interest rates charged on loans to staff are at rates below that would be charged in an arm’s length transaction. The loans
are secured with the assets financed.

No impairment losses have been recorded against balances outstanding during the period with key management personnel,
and no specific allowance has been made for impairment losses on balances with key management personnel and their
immediate relatives at the period end.

Included in deposits is GH¢6.2 million (2017: GH¢15.5 million) due to our subsidiary companies. Interest paid on deposits
from subsidiaries during the year amounted to GH¢2.4 million (2017: GH¢5.7 million).

All the transactions with the related parties with the exception of key management personnel are priced on arm’s length
basis and have been entered into in the normal course of business.
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33. Related Party Transactions (continued)

Remuneration of Directors and other Key Management Personnel
The following information is presented in accordance with IAS 24 ‘Related Party Disclosure’, which requires
disclosure of the employee benefits of Directors and other Key Management Personnel.

2018 2017
Salaries and other benefits 6,981 5,875
Employer social security charges on emoluments 564 496
7,545 6,371
Employee termination benefits
The Bank has contracts with key employees that entitles them to terminal benefits of six months salary for
every year served.
34.

DIRECTORS’ SHAREHOLDINGS
The Directors named below held the following number of shares in the company at the year end.
2018 2017
NAME OF DIRECTOR No. of Shares % No. of Shares %
Frank Brako Adu Jnr. 16,094,944 2.57 14,083,076 2.57
Philip Owiredu 1,317,146 0.21 1,152,503 0.21
Paarock Van Percy 807,318 0.13 706,403 0.13
Kobina Quansah 15,419 0.002 13,492 0.002
James C. Brenner - - 4,550 0.001
18,234,827 2.91 15,960,024 2.91
35. ANALYSIS OF SHAREHOLDING AS AT THE YEAR END 2018

No. of Holders No. of % of
Shareholders % Shares Holding
1 - 1,000 16,493 70.97 8,694,364 1.39
1001 - 5,000 5,296 22.78 9,464,205 1.51
5001 - 10,000 581 2.50 3,838,523 0.61
10,001 - 20,000 351 1.51 4,699,179 0.75
20,001 - 30,000 152 0.65 3,703,204 0.59
30,001 - 40,000 74 0.32 2,602,420 0.42
40,001 - 50,000 27 0.12 1,210,239 0.19
Over 50,001 267 1.15 592,372,493 94.54

23,241 100 626,584,627 100.00

95
CalBank
ANALYSIS OF SHAREHOLDING AS AT THE YEAR END 2017

No. of Holders No. of % of
Shareholders % Shares Holding
1 - 1,000 18,433 79.26 9,603,611 1.75
1001 - 5,000 3,588 15.43 7,733,546 1.41
5001 - 10,000 480 2.06 3,581,908 0.65
10,001 - 20,000 297 1.28 4,231,154 0.77
20,001 - 30,000 127 0.55 3,154,753 0.58
30,001 - 40,000 57 0.25 1,923,635 0.35
40,001 - 50,000 31 0.13 1,411,059 0.26
Over 50,001 241 1.04 516,621,883 94.23
23,254 100.00 548,261,549 100.00
Twenty Largest Shareholders

No. of %
Shares Holding
Shareholder
Social Security and National Insurance Trust 207,929,351 33.19%
ARISE B. V 173,520,791 27.69%
AIF Clients 8 Percent, Account 22,613,167 3.61%
Adu Jnr, Frank Brako 16,094,944 2.57%
Mr Daniel Ofori 15,377,194 2.45%
Allan Gray Africa, Ex - Sa Equity Fund Limited 13,664,627 2.18%
Kuwait INV Authority 8,979,086 1.43%
Frontier Market Opport Mast Fund 8,909,271 1.42%
Enterprise LIFE ASS. CO. Policy Holders 8,023,807 1.28%
KAPFRG INVESTIN PRO , AFRIKANSK 6,555,030 1.05%
Enterprise Tier 2 Occupational Pension Scheme 6,434,815 1.03%
Robeco Afrika Fonds N.V, 5,403,314 0.86%
SSB Eaton Vance Tax-, Managed Emerging Market Fund 5,036,062 0.80%
Enterprise Underwriters Tier 3 P4, 4,314,614 0.69%
ECG Pension Scheme Tier 3 Port 1 4,064,039 0.65%
EDC Ghana Balanced Fund Limited 3,384,229 0.54%
Stanbic Nominee AC Centum Exotics 3,366,145 0.54%
Gentrust Sankofa Master Trust Scheme 3,085,714 0.49%
Ansah, Benjamin Fosu 2,938,915 0.47%
HSBC BK PLC RE Mckinley Cptl Measa F.oeic Ltd, 2,729,700 0.44%
Top 20 Shareholders 522,424,815 83.38%

Others 104,159,812 16.62%
Grand Total 626,584,627 100.00%
96
CalBank
36. VALUE ADDED STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018
2018 2017
Interest earned and other operating income 883,706 877,343 774,014 784,250
Direct cost of Services (451,080) (448,949) (400,996) (397,846)
Value added by banking services 432,626 428,394 373,018 386,404
Impairments (66,735) (66,735) (54,947) (54,947)

Value added 365,891 361,659 318,071 331,457
Distributed as follows: 365,891 361,659 318,071 331,457
To Employees:-
Non Executive Directors (1,556) (1,675) (1,179) (1,241)
Executive directors (4,755) (5,013) (9,506) (9,733)
Other employees (117,553) (120,351) (90,749) (93,288)
To Government:
Income tax (67,413) (69,690) (63,171) (65,965)
To expansion and growth

Depreciation (9,557) (9,597) (6,978) (7,010)
Amortisation (2,117) (2,117) (1,322) (1,322)
Retained earnings 162,940 153,216 145,166 152,898
97
Our Branches
Ashanti Region Northern Region
Adum Branch Tamale Branch
Asafo Branch Western Region

Kejetia Branch
Anyinase Agency
KNUST Branch
Esiama Branch
Nhyiaeso Branch
Sekondi Branch
Suame Branch
Takoradi Harbour Branch
Greater Accra Region Takoradi Market Circle Branch
Achimota Branch Tarkwa Branch
Airport City Branch
Short Code Banking
Dansoman Branch
*771#
Derby Avenue Branch
East Legon Branch
Graphic Road Branch
Independence Avenue Branch
Kwame Nkrumah Avenue. Branch
Labone Branch
Legon Branch
Osu Branch
Ring Road Central Branch
Spintex Road Branch
Tema Community Branch
Tema Community 25 Branch
Tema Main Branch
West Hills Mall Branch
T: +233 (0) 302 680061-69, +233 (0) 302 680079

F: +233 (0) 302 680081, +233 (0) 302 680083
A: 23 Independence Avenue P.O.Box 14596 Accra
E: [email protected] | www.calbank.net
Call us Toll free on
0800 500 500

+233 302 739 900 (from international line)

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CalBank

Four-Year Group Consolidated Financial Summary 2

Board of Directors, Officials and Registered Office 3

Profile of Board of Directors 4

Managing Director’s Report 10

Report of the Directors 15

Corporate Governance Statement 17

Report of the Auditors 22

Statements of Comprehensive Income 26

Statements of Financial Position 27

Statements of Changes in Equity 28

Statements of Cash Flows 30

Notes to the Financial Statements 31

FOUR-YEAR GROUP CONSOLIDATED

Interest Income 773,270 668,128 557,631 466,822

CALBANK LIMITED BOARD OF DIRECTORS,

SOLICITORS Reindorf Chambers

REGISTRAR Central Securities Depository (GH) Limited

REGISTERED OFFICE 23 Independence Avenue

Mr. Paarock A. VanPercy - Chairman

Mr. Van Percy, age 59 is an Investment Banker. He is a Chartered Accountant

Mr. Frank B. Adu Jnr. - Managing Director

Mr. Philip Owiredu - Executive Director

Dr. Kobina Quansah - Non-Executive Director

Mr. Malcolmn D. Pryor - Non-Executive Director

Mrs. Helen Nankani - Non-Executive Director

Mr. Kofi Osafo-Maafo - Non-Executive Director

Nana Otuo Acheampong - Non-Executive Director

Ms. Rosalind Nana Emela Kainyah - Non-Executive Director

Mr. Jojo Acquah

Introduction Our performance has been underpinned by our digital

CHAIRMAN’S REPORT (Continued)

We expect this to improve going forward as lending picks 6,000,000

by the growth in industrial activities and a robust consumer 3,000,000

150,000 very near future to ensure we do not breach regulatory

2016 2017 2018

billion to GH¢5.4 billion. This growth was achieved through 0.60

the effective deployment of resources sourced from 0.40

Our stock price however, dropped from GH¢1.08 at the

CHAIRMAN’S REPORT (Continued)

Corporate Governance We will continue to leverage on technology to take our

In accordance with statutory requirements and the Bank’s

MANAGING DIRECTOR’S REPORT

Introduction 2018 and real GDP growth prospects remain favorable

MANAGING DIRECTOR’S REPORT (Continued)

the Bank through technology to make their lives better. 1,000,000

300,000 Net Loans and Advances

the period. Total assets of the Group increased by 28.3%

MANAGING DIRECTOR’S REPORT (Continued)

MANAGING DIRECTOR’S REPORT (Continued)

We have fully implemented IFRS 9 – Financial Instruments,

MANAGING DIRECTOR’S REPORT (Continued)

Frank Brako Adu Jnr.

REPORT OF THE DIRECTORS

Statement of Directors Responsibilities

Financial Statement 2018 2017

• To carry on the business of banking;

REPORT OF THE DIRECTORS (Continued)

Retirement and Re-Election of Directors