Calbank 2019 Annual Report

CalBank
VISION
Our Vision
The Bank’s vision is to be a leading financial services group creating sustainable value for our
stakeholders
Our Mission
We aspire to be a financial services group of preference through delivery of quality
service, using innovative technology and skilled personnel to achieve sustainable growth
and enhanced stakeholder value.
The CalBank Brand, with its tagline Forward Together, demonstrates the Bank’s progressive and
dynamic intentions, whilst at the same time taking both its staff and customers with them –
‘we are together as one, for the future

benefit of all’.
Forward - represents both the future direction of the business and the progressive manner in
which it will deliver its offering and proposition.
Together - represents the whole and covers the customers, investors and staff, including the
wider community to which the bank is responsible.
• Values – Responsible, Effective, Decisive (RED) •
&
• Personality – Smart, Friendly, Trusted
MISSION
2019 1
CalBank
Content Page
Notice of Annual General Meeting 3
Four-Year Group Consolidated Financial Summary 4
Corporate Information 5
Profile of Board of Directors 6
Chairman’s Report 10
Managing Director’s Report 14
Report of the Directors 18
Corporate Governance Statement 22
Sustainability Report 30
Independent Auditor’s Report 34
Statements of Comprehensive Income 39
Statements of Financial Position 40
Statements of Changes in Equity 41
Statements of Cash Flows 43
Notes to the Financial Statements 44
Resolutions to be Passed 121
Corporate Social Responsibilities 123
Proxy Form 129
2 2019
CalBank
NOTICE OF ANNUAL GENERAL MEETING

OF CALBANK LIMITED
NOTICE IS HEREBY GIVEN that the Annual General Meeting of CalBank Limited will be held at 10 a.m. on Wednesday,
6 May, 2020 at the main auditorium of the Accra International Conference Center, Castle Road, Accra to transact the
following business:
AGENDA
ORDINARY BUSINESS
1. To receive and consider the accounts of the Bank, and the reports of the directors and the external auditor thereon,
for the year ended December 31, 2019
2. To re-elect to the Board of the Bank directors retiring by rotation
a. Rosalind Kainyah
b. Kofi Osafo-Maafo
c. Nana Otuo Acheampong
3. To re-elect a director appointed to fill a casual vacancy on the Board
• Mr. Kweku Baa Korsah
4. To declare a dividend.
5. To approve the remuneration of the directors
6. Authorise the directors to fix the fees of the external auditor
SPECIAL BUSINESS:
7. To approve the Purchase of Shares of the Bank
Dated this 6th day of February 2020
BY ORDER OF THE BOARD
VERITAS ADVISORS LIMITED

COMPANY SECRETARY
Note
A member entitled to attend and vote at the Annual General Meeting may appoint a proxy to attend and vote
on his/her behalf. Such a proxy need not be a member of the Company.
The appointment of a proxy will not prevent a member from subsequently attending and voting at the
Meeting in person. Where a member attends the Meeting in person, the proxy appointment shall be deemed
to be revoked.
A copy of the Form of Proxy may be deposited at the registered office of the Registrar of the Company,
Central Securities Depository Ghana Limited, 4th floor, Cedi House, Accra or posted to the Registrar at PMB
CT 465 Cantonments, Accra to arrive not later than 10a.m. on Monday, May 4, 2020.
2019 3
CalBank
FOUR-YEAR GROUP CONSOLIDATED

FINANCIAL SUMMARY
2019 2018 2017 2016

in thousands of Ghana Cedis
Interest Income 912,409 773,270 668,128 557,631

Interest Expense (394,303) (351,641) (317,096) (306,317)

Net Interest Income 518,106 421,629 351,032 251,314

Commissions and fees 46,597 69,543 68,063 67,133
Other Operating Income 31,689 28,085 43,137 48,730

Operating Income 596,392 519,257 462,232 367,177

Operating Expenses (267,386) (229,616) (188,422) (150,883)
Net Impairment Loss on Financial Assets (86,066) (66,735) (54,947) (199,243)

Profit Before Income Tax 242,940 222,906 218,863 17,051

Income Tax Expense (69,527) (69,690) (65,965) (6,843)

Profit after Taxation 173,413 153,216 152,898 10,208

Total assets 7,048,498 5,419,299 4,223,138 3,618,858
Total Deposits 3,858,984 3,150,053 2,497,623 2,375,194
Loans and Advances 2,920,026 2,422,952 1,853,674 1,966,394
Total Shareholders’ Equity 974,787 779,445 672,070 519,503
Earnings per share (Ghana Cedis per share) 0.2772 0.2449 0.2793 0.0187
Dividends per share (Ghana Cedis per share) 0.0480 0.0000 0.0000 0.0000
Number of Shares (‘000) 626,585 626,585 548,262 548,262
Return on Assets 2.5% 2.8% 3.6% 0.3%
Return on Equity 17.8% 19.7% 22.8% 2.0%
Capital Adequacy Ratio 22.7% 16.7% 21.9% 19.3%
Cost-to-Income Ratio 44.8% 44.2% 40.8% 41.1%
4 2019
CalBank
CORPORATE INFORMATION
BOARD OF DIRECTORS Paarock Asuman VanPercy (Chairman)

Philip Owiredu (Managing Director) (appointed 1/1/2020)
Helen Nankani
Nana Otuo Acheampong
Rosalind Nana Emela Kainyah
Kofi Osafo-Maafo
Kweku Baa Korsah (appointed 8/5/2019)
Joe Rexford Mensah (appointed 1/1/2020)
Ben Gustave Barth (appointed 1/1/2020)
Solomon Asamoah (appointed 1/1/2020)
Richard Arkutu (appointed 1/1/2020)
Frank B. Adu Jnr. (Retired 31/12/2019)
Malcolmn Dermott Pryor (Retired 31/12/2019)
Dr. Kobina Quansah (Retired 31/12/2019)

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

61 Jones Nelson Road
Adabraka
P. O. Box 821
Accra
Ghana
AUDITOR 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
2019 5
CalBank
BOARD OF DIRECTORS
Mr. Paarock VanPercy Mr. Philip Owiredu Mrs. Helen Nankani Nana Otuo Acheampong
(Chairman) (Managing Director) (Non-Executive Director) (Non-Executive Director)
age 59 age 53 age 73 age 70
Mr. VanPercy, is an Investment Banker. He was appointed to CalBank Board on 9th December 1999. He is a
Chartered Accountant by training and is a Fellow of the Institute of Chartered Accountants, England & Wales. He is the
Chairman of CalAsset 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. Owiredu, is the Managing Director of CAL Bank, a position he assumed from 1st January 2020. He has worked
with the Bank for fifteen years holding various positions including Financial Controller and General Manager of the
Bank. Prior to assuming his current role, he was the Chief Financial Officer/Executive Director of the Bank for nine
years. During his tenure at the Bank he has been responsible for various aspects of the Bank’s business, including
having oversight responsibilities for all financial and management accounting support and compliance with legal and
regulatory requirements amongst others. Mr. Owiredu joined the Bank in December 2004 from KPMG where he left
as a Senior Manager after eight years. He had responsibility for managing various audit assignments. He is a fellow of
the Association of Chartered Certified Accountants (UK).
Mrs. Nankani, is a retired Senior Economist who worked with the World Bank for 22 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 4 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. She studied at the
University of Ghana, Legon, and at Harvard University, Cambridge, Massachusetts.
Nana Otuo Acheampong, is currently a Banking Consultant and a former Executive Head of the Osei Tutu II Centre
for Executive Education & Research in Ghana. He was a Senior Lecturer in Finance at the University of Portsmouth in
the UK for over a decade and half before returning to Ghana in 2004. He headed the Faculty of Financial Reporting &
Investment Banking at the National Banking College. He now leads the First Module of the Bank of Ghana’s Corporate
Governance Certification programme for the Boards of Directors for Banks, Savings and Loans Companies, Finance
Houses and Financial Holding Companies under the auspices of the National Banking College . He was the Chairman
of the Award Planning Board of the Ghana Banking Awards until 2016. He has extensive theoretical and practical
knowledge and experience in banking, finance and management. He holds an MSc in Accounting & Management
Science from the University of Southampton & a postgraduate diploma in Management as well as an Accounting degree
from University of Northumbria at Newcastle. He chairs the Board for the Health Facilities Regulatory Agency.
6 2019
CalBank
Ms. Rosalind Kainyah Mr. Kofi Osafo-Maafo Mr. Kweku Baa Korsah Joe Rexford Mensah
(Non-Executive Director) (Non-Executive Director) (Non-Executive Director) (Non-Executive Director)
age 62 age 50 age 59 age 65
Ms. Rosalind Kainyah MBE, is the Founder and Managing Director of Kina Advisory Limited. She is a trusted advisor
to global companies on responsible business investment and partnerships in Africa, with decades of experience in
corporate and environmental law, government relations, political risk management and sustainability. Rosalind was
a corporate lawyer at the international law firm, Linklaters and went on to hold executive positions at De Beers and
Tullow Oil plc. She is Vice Chairperson of the Africa Gifted Foundation; Founding President of the Ghana chapter of
International Women’s Forum; and on the Advisory Boards of The Boardroom Africa and Invest in Africa. Rosalind
has been a Non-Executive Director of the Norwegian oil company, Aker Energy and of GEMS Africa. She holds a BA
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. In 2014 Rosalind
was awarded an MBE for services to CSR for the benefit of youth in Africa.
Mr. Kofi Osafo-Maafo, is the Deputy Director General, Investments & Development at Social Security & National
Insurance Trust (SSNIT) of Ghana. He is a senior investment professional with 22 years’ experience in the UK
investment management and investment banking Industry. Kofi has held senior positions at Pictet Asset Management,
Unicredit Bank and HSBC Global Asset Management. He has experience across a wide range of sectors including Oil
& Gas, Mining, Building & Construction and Agriculture and Chemicals, covering transactions across Europe, North
America, and Global Emerging Markets including Africa. Kofi holds an MA (International Business & Finance) from
University of Reading (UK) and a BSc (Economics) from Queen Mary’s College, University of London.
Mr. Kweku Baa Korsah is a Strategy and Technology consultant who currently works as a Managing Director for
BC Payments Ltd a Fintech in the payments industry. Before then he was the Managing Director for Bluechain
Africa Ltd. developers of the payment technology being rolled out by BC Payments Ltd in Ghana. He also worked
with JMR Infotech Ghana Ltd as the Chief Executive Officer. Mr Korsah was the Chief Operating Officer (COO) for
Ghana interbank Payment and Settlement Systems Ltd (GhiPSS), he worked as an Internet Marketing Consultant
with WSI-Applied Technology and before then was a Partner with KPMG. He is a fellow of the Chartered Institute of
Management Accountants, (FCMA), and is a Chartered Global Management Accountant (CGMA). He has an MSc. In
Business Systems Analysis and Design from City University, London, UK.
Joe Rexford Mensah is a corporate banker with over 35 years’ experience in banking both in Ghana and Europe.
He was the CEO for Ghana International bank PLC in London for 14 years where he created a culture based on
performance, efficiency and engagement that placed the Bank on a growth trajectory to become the leading Sub
Saharan Bank in the City of London. Prior to this he was the General Manager of Ghana International Bank for over 4
years. Mr Mensah worked as Head of International Banking at the then Trust Bank Ghana and also at the Agricultural
Development bank where he introduced the Western Union Service to Ghana for the first time. He holds a Master’s
degree in Banking and Finance and a Bachelor’s Degree in Business Administration. He is a Fellow of the Institute of
Directors (UK).
2019 7
CalBank
Mr. Ben Gustave Barth Mr. Solomon Asamoah Mr. Richard Arkutu Mr. Jojo Acquah
(Non-Executive Director) (Non-Executive Director) (Non-Executive Director) Company Secretary
age 45 age 56 age 47 Veritas Advisors Limited
Mr. Ben Gustave Barth is a seasoned, multidisciplinary finance and consulting executive with 18 years proven track
record in analyzing and assessing risk of investment portfolios and in structuring transactions. At the moment, he is the
Managing Director for Axcero Advisors. Prior to this, he was a senior partner with The Highland Group, Accra, and Lagos.
He also served as the COO and VP Finance with Chester Engineers Africa Inc., Accra, Lagos, and Pittsburgh (USA). Mr.
Barth was the Director of Business Development at Jonah Capital Limited. He also worked with Stanbic Bank Ghana
Limited as the regional Operations Head. Prior to this, he worked with Ecobank Ghana and Citibank N.A, New York,
USA. Mr. Barth has a Master’s degree from Harvard Business School, Boston, MA, USA and a first degree in Business
Administration from the University of Ghana, Legon.
Mr. Solomon Asamoah has over 25 years of experience in transactions and has personally led over US$4billion in
transactions across the African continent. In his current role as CEO of the Ghana Infrastructure Investment Fund
(GIIF), he oversees origination, structuring and investment into infrastructure-related projects across Ghana. Prior to
this role he held a number of notable positions including Vice President for Infrastructure, Private Sector and Regional
Integration at the AfDB; Deputy CEO and Chief Investment Officer of the Africa Finance Corporation (AFC); Vice
President for Private Sector and International Investments at the Development Bank of Southern Africa (DBSA), and
Special Assistant to the CEO of the International Finance Corporation (IFC) and Managing Director of the World Bank.
Prior to this, Mr. Asamoah was an investment banker in the City of London with HSBC Markets. He has a Master’s
degree in Chemical Engineering from Imperial College in London.
Mr. Richard Arkutu is a finance professional. He worked with the International Finance Corporation (IFC), a member
of the World Bank Group for 14 years in Infrastructure Development. Prior to this, Mr. Arkutu was the Vice President
of Citibank, Sub-Saharan Africa Corporate Finance and Investment Banking Department, based in Nairobi and Lagos
over a 4 year period. Mr. Arkutu worked as a Senior Financial Analyst for Ashanti Goldfields Company Limited in
their Corporate Finance & Treasury Department for two and a half years focused on project financing of new mines.
He has a Master’s degree from McGill University, Montreal, Quebec, Canada as well as a first degree in Business
Economics from Vesalius College, Vrije Universiteit, Brussels, Belgium.
8 2019
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2019 9
CalBank
CHAIRMAN’S REPORT
Introduction
Distinguished Ladies and Gentlemen, on behalf of the Board of Directors, it is my pleasure to welcome you to the Annual
General Meeting of CalBank Limited for the year ended 31st December 2019.
The year 2019 witnessed some upheaval in the banking and financial services sector following a cleanup exercise by
the Bank of Ghana of what were deemed to be weak banks, savings and loans and microfinance companies. It was
also a year in which we had to consolidate our position in the banking sector after the various regulatory reforms were
introduced and also had to achieve our minimum capital requirement. Despite the seeming turmoil arising from these
reforms, your Bank continued to maintain a healthy balance sheet and improved profitability for the year under review.
Economic Review
The Ghanaian economy expanded significantly in the first quarter of 2019, but the momentum moderated in the last two
quarters, driven by a slowdown in Industrial output.
Provisional estimates indicate that the domestic economic performance as measured by growth in Gross Domestic
Product is estimated at 7.1% for 2019 compared to 6.8% for full year 2018.
Inflation remained largely subdued dropping from 9% at the beginning of year to 7.9% in December 2019. As a result,
the Monetary Policy Committee of the Bank of Ghana maintained a policy rate of 16% throughout the year as in its view,
risks to inflation outlook were broadly balanced and inflation was set to remain within the target band.
The result was that yields on Government Treasury securities remained fairly stable across the yield curve. At the end
of December 2019, the 91-day Treasury bill rate increased marginally to 14.69% from 14.59% a year before. That
notwithstanding, the local currency experienced a fairly significant depreciation of 12.9% against the United States Dollar,
11.2% against the Euro and 15.8% against the British Pound.
10 2019
CalBank
Chairman’s Report (Continued)
Financial Review
Group Profits
Ladies and Gentlemen, I am pleased to inform you 250,000
that in spite of the increased competitiveness in the 200,000
Ghana Cedis'000
industry, we were able to leverage on our strong 150,000
local brand and the loyalty of our valued customers 100,000
50,000
to improve on our profitability. The group recorded
0
a profit after tax of GHS174.3 million, an increase PBT PAT
of 13.2% over the prior year’s profit of GHS153.2 2017 2018 2019
million.
Total Assets
The Group’s total assets increased by 30.0% from
8,000,000
GHS5.4 billion to GHS7.0 billion. This increase is Ghana Cedis'000
6,000,000
well aligned with the growth and financing strategy
the Group has been pursuing over the past few 4,000,000
years. 2,000,000
0
2017 2018 2019
Share Price Performance
The share price experienced a lot of volatility during the year with a price GHS0.98 at the beginning of the year, a high of
GHS1.04 during the year but declining to GHS0.89 at the end of the year. This however was not peculiar to the CalBank
stock but was experienced across various stocks with the financial stocks being significantly affected.
We are optimistic that as we continue to create value for the Bank, shareholders will be rewarded with significant positive
movement in the value of the share price in the years ahead.
Capitalisation
Performance of Cal Bank Stock
At the end of year, the Bank continued to maintain 1.20
a strong capital position with a minimum paid-up 1.00

Share Price (GH¢)
capital of GHS400 million as required by regulation 0.80
0.60
and a capital adequacy ratio of 22.7%, which is 0.40
above the statutory minimum limit of 13%. 0.20
0
IPO Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec
Price '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Dividend
The Board remains committed to shareholder value creation and will continue to ensure the generation of adequate
returns to our shareholders. In the past couple of years, shareholders have supported the Board with the re-investment
of returns into the business by way of boosting the balance sheet for bigger and more profitable transactions. The Board
feels much obliged for this support whilst still appreciating the importance of cash dividend to our shareholders, and have
the pleasure in recommending a dividend of GHS0.089 per each ordinary share for the financial year 2019.
2019 11
CalBank
Corporate Governance
Sound and effective corporate governance is essential for the long-term success of the Bank. The Board therefore remains
committed to fulfilling its corporate governance obligations and responsibilities in the best interests of the Bank and its
shareholders. The CalBank Board charter establishes the framework through which our responsibilities are executed and
serve as the basis for evaluating our performance.
In the course of the year, members of the Board were taken through various training modules of Corporate Governance
for a considerable amount of time by both internal and external resource persons. The Board shall at all times ensure
the Bank is complaint with any corporate governance directives issued by our regulators and be guided by these in the
attainment of the Bank’s corporate mission.
Changes in the Board of Directors
Over the past decade, you have supported the Bank with a group of dedicated people of diverse backgrounds and
expertise to serve on the Board of the Bank.
During the year, the Managing Director, Mr. Frank B. Adu Jnr. and two Non-Executive Directors Mr. Malcolmn Pryor
and Dr. Kobina Quansah retired as directors of the Bank after years of meritorious service ranging between eleven and
twenty- nine years. I am sure you join me in thanking them for their immense contribution to the development of your
Bank during their tenure.
Distinguished Ladies and Gentlemen, I am delighted to inform you that your Board, with the approval of Bank of Ghana,
appointed Mr. Philip Owiredu to take up the role of Managing Director effective 1st January 2020. Mr. Kweku Baa Korsah
was also nominated by the Board and approved by the Central Bank to join your Board during the year. Also, at the
Extraordinary General Meeting of shareholders held on 5th December 2019, Mr. Joe Rexford Mensah, Mr. Richard Arkutu,
Mr. Ben Gustave Barth and Mr. Solomon Asamoah were approved by shareholders to join the Board, after they had been
vetted and approved by the Bank of Ghana.
Please join me in welcoming them to the Board as we look forward to harnessing their various experiences to support
the growth and development of the bank.
Outlook
The 2019 economic indicators showed that the economy still has fiscal challenges as projected revenues were not being
achieved and therefore a widening of the fiscal deficit. However, the 2020 Budget as presented provides a medium-term
direction on consolidating some of the macro-economic gains made in the last three years to serve as a propeller in driving
economic transformation in the coming years.
The future for the sector and the Bank in particular looks bright. A consequence of the financial sector reforms and
cleanup is the renewed confidence of members of the public in the banking sector. This Is buoyed by the introduction of a
deposit insurance scheme to safeguard depositors’ funds. We expect all this to translate into positive gains for the for Bank
as we have positioned ourselves to take advantage of these gains. Coupled with this, the recent changes in Management
and a reinvigorated Board should help drive our new strategic initiatives. Altogether, the Bank has a robust base on which
to anchor our drive to enhance stakeholder value in the years ahead. This will be achieved through strict cost discipline
and enhanced risk management.
12 2019
CalBank
This year, 2020, presents yet another milestone as the country goes into its eighth presidential and parliamentary elections
and I am confident that our political stability and democratic credentials would be further enhanced by the maturity we
continue to show in how we conduct our elections.
Conclusion
On behalf of the Board I wish to express our sincere appreciation to our valued customers, shareholders and regulators
for your business, unwavering support, encouragement and guidance in the past year.
My gratitude also goes to my colleague Board members for the assiduous efforts and dedication that has brought us this
far. I am glad to have served with you all.
Finally, I would like to thank management and staff of the Bank for your contribution to the growth and overall
achievements in 2019. Ladies and Gentlemen, I thank you all for your kind attention and I am confident we will continue
to deliver strong and consistent performance as reward for placing your trust in us.
Paarock VanPercy
Chairman
2019 13
CalBank
MANAGING DIRECTOR’S REPORT

Be sure to put your feet in the right place, then stand firm”
Abraham Lincoln
Introduction
Dear shareholders, I am pleased to present to you my Ladies and Gentlemen, in the face of significant
report on the performance of your Bank for the year headwinds, amidst tight monetary and fiscal policy regime,
2019, a year that still experienced further regulatory the Ghanaian economy remained resilient in 2019. As of
reforms especially within the downstream financial sector, December 2019, the country’s provisional fiscal deficit was
however it also consolidated the gains from the reforms at 4.8% of GDP, widening from a deficit of 3.9% of GDP
in prior years. for the year end 2018. This was largely due to lower
than expected revenue which was 10.1% short of target,
Your Bank continues to remain robust and is fast embracing albeit showing an 11.2% growth year-on-year even though
all the opportunities the emerging financial technology expenditure was 8.4% lower than budget.
industry presents as we fast track our digitization agenda.
I am pleased to announce that your Bank was able to Headline inflation, remained largely controlled in 2019,
report improved financial and operational results for the trending downwards from 9% in January 2019 to close
year ended 2019. the year at 7.9%. The Monetary Policy Committee of the
Central Bank kept its benchmark policy rate unchanged at
Globally, economic growth has witnessed significant 16% for the rest of the year after cutting it by 100bps in
slowdown than expected. Emerging and developing January 2019.
economy growth has largely been constrained by sluggish
investments, and risks continue to shift to the downside. Interest rates witnessed marginal increases across
These risks include rising trade barriers and higher-than- the maturity spectrum mostly on the back of negative
expected slowdowns in several major economies. In the investor sentiments about global economic outlook and
midst of increasing geopolitical tensions among developed the impact on the Ghanaian economy. The Cedi continued
economies (US and China), developing markets continue to depreciate against the major trading currencies,
to face the most daunting challenges because of their depreciating against the US Dollar by 12.9% by the end
unique fragilities. of the year.
14 2019
CalBank
Managing Director’s Report (Continued)
During the year we remained resolute to confront the risks we faced to deliver on our mandate of adding long -term
sustainable value to our shareholders.
Financial Performance
The Bank continues to make stable progress even under conditions which are not very flourishing. Our balance sheet
remains robust, liquid and well-funded, the Bank continues to remain solvent and well capitalised.
The Group’s balance sheet size grew by 30.0% during the period from GHS5.4 billion to GHS7.0 billion in line with
increases in customer deposits and borrowings
which went up by 19.8% and 53.7% respectively.
Total Deposits
4,000,000
The Bank’s profit before tax was GHS241.9 million Ghana Cedis'000 3,000,000
compared to GHS230.3 million recorded in 2018. 2,000,000
Similarly, the Bank’s profit after tax increased by 1,000,000
7% to GHS174.3 from GHS162.9. 0

2017 2018 2019
Over the past decade, our strategy to balance our Savings Time Current
financing mix with more long -term debt continue

to yield sound benefit to the Bank.
Operating Income
During the period under review, we signed
agreements with African Trade Finance, Agence 600,000
Française De Developpement, Overseas Private 500,000

Ghana Cedis'000
Investment Corporation and CitiBank totaling 400,000
300,000
USD228 million including a grant component to
200,000
support our clients who are into renewable energy 100,000
and energy efficient projects. 0
2017 2018 2019
Other Income Commission & Fees Net Interest Income

Again, during the period under review, gross loans
increased by 19.9% to GHS3.1 billion, from the
2018 end year value of GHS2.6 billion. The growth rate is a decrease compared to the prior year growth rate of 26.6%,
prevailing market conditions and our loan growth strategy required we gradually de-risk our loan portfolio to improve the
health of the balance sheet. The recognition of some construction sector loans as non-performing, resulted in an increase
in our non-performing loans ratio to 9.9% as compared to the prior year ratio of 8%.
Your Bank’s total shareholders’ equity increased by

26% to GHS960.9 million from GHS764.6 million Net Loans and Advances
the previous year. The Bank’s capital adequacy ratio
increased to 22.7% at the end of the year from 3,000,000
16.5% the previous year after the implementation of

Ghana Cedis'000
2,500,000
capital requirement directive from Bank of Ghana,
2,000,000
which is higher than the regulatory minimum limit
of 13%. 1,500,000
1,000,000
2017 2018 2019
2019 15
CalBank
Operational Performance
The year 2019 was yet another remarkable period

of improved operational outturn. We continued Shareholders' Funds
with our strategy of building a digital bank, with 1,000,000
the introduction of various e-product and process 800,000
Ghana Cedis'000
initiatives. We commenced our agent banking 600,000
channel in the course of the year, immediately 400,000
deploying the product to the four regions in which 200,000
we are present, signing on 149 agents with 24,783 0

2017 2018 2019
customers by the end of the review year.
Our women banking offering has also gained momentum in the market, disbursing over GHS24 million loans to women
in various sectors such as trade, commerce and agro-processing.
Our bond trading activity also commenced during the year, we realised appreciable revenue and market share from this
activity albeit it being our first year into this activity.
We continue to enhance and upgrade our risk management systems and processes, in pursuit of this we continued to
address all improvement logs pertaining to PCI-DSS and ISO27001 to ensure we obtain recertification when due. We
have to a large extent complied with the directives that are due to be complied with under the Cyber Security Directives
of the Bank of Ghana and will continue to ensure full compliance as and when they fall due.
Regulation
The Bank of Ghana in August 2019 revoked the licenses of over 400 Non-Bank and Micro Finance Institutions, which
were deemed insolvent, bringing the financial sector reforms to an end.
The above coupled with other reforms to the fund management and other related financial services sectors, although
initially was challenging, has resulted in an improvement in the stability of the banking and financial services sectors, it is
expected that this will continue.
The Ghana Deposit Protection Scheme was established by promulgation of the Ghana Deposit Protection Act, 2016,
Act 931 as amended by the Ghana Deposit Protection (Amendment) Act, 2018, (Act 968) which became operational in
September 2019. The Act requires all banks and specialized deposit-taking institutions licensed by the Bank of Ghana to
be members of the scheme of which your bank has complied and have started contributing to the scheme.
The Ghana Companies Act, 2019 (Act 992) has been assented into law to replace the Companies Act, 1963 (Act 179).
Among others, the key changes include Creation of the Office of the Registrar of Companies, Qualifications for Company
Secretaries etc.
We have fully implemented IFRS 16, which relates to leases, as promulgated by the International Accounting Standards
Board (IASB) to address the grey areas of substance over form in Lease accounting under IAS 17. We have fully
implemented the provisions of this standard in the 2019 financial statements.
Corporate Social Responsibility
Over the past decade, corporate social responsibility (CSR) remained vitally important to who we are as a Bank. The
Bank’s CSR activities continues to be deeply rooted in Education, Healthcare, Sports Development and Culture guided by
our commitment to the highest standard of corporate citizenship.
16 2019
CalBank
During the year, we continued with our annual “time with the needy child” project, an initiative which the Bank through
the efforts of employees offer help with the upkeep of children in deprived communities. Also, we kept to our long-
standing tradition of providing support and hope to brilliant but needy students in tertiary institutions by the award of
scholarships to cover their tuition and other educational needs.
The bank also donated newborn care equipment to the Neotenal Intensive Care Unit (NICU) of the St. Martins De Porres
Hospital at Eikwe in the Western Region of Ghana as part of our “new care project” initiative that seeks to help mitigate
infant mortality in Ghana.
To mark the ninth anniversary of our sponsorship of the National Beach Soccer, a new package was unveiled to include
sponsorship for the development of a Domestic National Super League.
In pursue of our commitment to sustainable Banking, we sign up to the Sustainable Banking Principles and guidance notes
put in place by the Central Bank.
Subsidiaries
Our subsidiaries continue to contribute significantly to the growth of the group. CalAsset Management Limited contributed
a total of GHS3.7million to the Group’s profitability, representing 2.7% of the group’s profit after tax in 2019. Funds under
management by the company increased to GHS1.1 billion from GHS908.2 million the previous year, an increase of 28.2%.
CalNominees Limited continues to manage our custody offering. Assets under custody increased to GHS1.8 billion from
GHS1.5 billion at the end of the previous year having scaled up its clientele base during the year.
In the course of the year, the bank took a strategic business decision to voluntarily exit the securities market. Pursuant to
section 7&8 of the GSE Membership Rules, the Ghana Stock Exchange approved the resignation of CalBrokers Limited
on 13 December 2019. We are undergoing the necessary regulatory processes to finally exit the market.
Conclusion
The year 2020 commemorates thirty years of our existence as a Bank, it commences the journey to consolidate the
gains made in the last decade. The agenda to transform our banking offering and processes is being pursued strongly, we
are committed to building a Bank that would serve the needs of all and make a meaningful impact on the society and
stakeholders whom we serve. We are mindful of the task ahead, but confident that we have the personnel, the systems
and the processes to deliver improved operational results in the coming years.
On behalf of management, I would like to thank our Board for their leadership and oversight, our customers for their
business and our staff for their commitment to make CalBank a strong institution.
Thank you.
Philip Owiredu
Managing Director
2019 17
CalBank
REPORT OF THE DIRECTORS

TO THE MEMBERS OF CALBANK LIMITED
The Board of Directors has the pleasure to submit this report of the Bank and Group for the year ended 31 December
2019.
Statement of Directors Responsibilities

The directors are responsible for the preparation of consolidated and separate financial statements that give a true and
fair view of CalBank Ltd, comprising the statements of financial position at 31 December 2019, and the statements of
profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and the notes
to the financial statements which include a summary of significant accounting policies and other explanatory notes, in
accordance with International Financial Reporting Standards and in the manner required by the Companies Act, 2019 (Act
992) and the Bank Specialised Deposit-Taking Institutions Act, 2016 (Act 930). In addition, the directors are responsible
for the preparation of the report of the directors.

The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error, and for maintaining
adequate accounting records and an effective system of risk management.
The directors have made an assessment of the ability of the Bank and its subsidiaries (“the Group”) to continue as going
concerns and have no reason to believe that the businesses will not be going concerns in the year ahead except for
CalBrokers Ltd that resigned from the Ghana stock Exchange on 13 December 2019 .
The auditor is responsible for reporting on whether the consolidated and separate financial statements give a true and fair
view in accordance with the applicable financial reporting framework.
2019 2018
n thousands of Ghana Cedis
Bank Group Bank Group
Financial Statement
Profit for the year ended 31 December 241,951 242,940 230,353 222,906
From which is deducted taxation of (67,666) (69,527) (67,413) (69,690)
giving a profit for the year after taxation of 174,285 173,413 162,940 153,216
to which is added balance on retained earnings brought forward

(excluding amounts transferred to Regulatory Reserves) of 58,140 73,666 275,883 301,133
IFRS 9 transition adjustment - - (17,086) (17,086)
Transfer from regulatory credit risk reserve - - 17,086 17,086
leaving a balance of 232,425 247,079 438,823 454,349
Transfer to stated capital - - (300,000) (300,000)

Transfer from credit risk reserve 16,042 16,042 18,741 18,741
Tax charge on transfer to stated capital - - (17,954) (17,954)
Less transfer to regulatory statutory reserve (43,571) (43,571) (81,470) (81,470)
giving a cummulative amount available for distribution of 204,896 219,550 58,140 73,666
less dividend paid (30,077) (30,077) - -
leaving a balance on retained earnings carried forward of 174,819 189,473 58,140 73,666
18 2019
CalBank
Report Of The Directors (Continued)
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.
Substantial Shareholders
Details of the Bank’s twenty largest shareholders are disclosed in Note 38 of the Annual Report
Retirement and Re-Election of Directors

The following directors of the company, Ms. Rosalind Nana Emela Kainyah, Mr. Kofi Osafo-Maafo and Nana Otuo
Acheampong will retire in accordance with section 325(a) of the Companies Act, 2019 (Act 992) and Regulation 78(b) of
the Regulations of the company.
Ms. Rosalind Nana Emela Kainyah, Mr. Kofi Osafo-Maafo and Nana Otuo Acheampong, who are eligible for re-election,
have offered themselves to be re-elected as directors of the company. The Board will recommend that they be so re-
elected.
Subsidiaries
CalAsset Management Company Limited, a company incorporated in Ghana and 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)
CalBrokers Limited, a company incorporated in Ghana as a securities broker and a licensed dealing member of the Ghana
Stock Exchange. CalBrokers Limited resigned from the Ghana Stock Exchange on 13th December 2019.
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 Group. These investment have been fully
impaired from the Group’s book.
2019 19
CalBank
Report Of The Directors (Continued)
Particulars of entries in the Interests Register during the financial year

No Director had any interest in contracts and proposed contracts with the Company during the year under review, hence
there were no entries recorded in the Interests Register as required by 194(6),195(1)(a) and 196 of the Companies Act
2019, (Act 992).
Corporate social responsibility and code of ethics

A total of GHS708,000 (2018: GHS482,000) was spent under the Group’s or Company’s social responsibility programme
with key focus on education, health, financial inclusion and others.
Capacity building of directors to discharge their duties

On appointment to the Board, Directors are provided with full, formal and tailored programmes of induction, to enable
them gain in-depth knowledge about the Company’s business, the risks and challenges faced, the economic knowledge
and the legal and regulatory environment in which the Company operates. Programmes of strategic and other reviews,
together with the other training programmes, ensure that Directors continually update their skills, knowledge and familiarity
with the Company’s businesses. This further provides insights about the industry and other developments to enable
them effectively fulfil their role on the Board and committees of the Board. During the year the Directors engaged in
programmes covering; Corporate Governance in Perspective, Regulatory Response to Corporate Governance Challenges
in Banks and Financial Institutions and the Balance Sheet Framework for Board of Directors.
Auditors and Audit fees

In accordance with Section 139(5) of the Companies Act, 2019 (Act 992), KPMG will remain in office as auditors for the
group. As at 31 December 2019, the amount payable in respect of audit fees was GHS300,000.
Going Concern
The Board of Directors have made an assessment of the Group’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 Group’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 0.089 (2018: GHS0.048) per share to be paid to members.
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 Group over the past year.
Approval of the report of the directors

The report of the directors of CalBank Limited, was approved by the board of directors on 26 February 2020 and signed
on their behalf by
Philip Owiredu Paarock A. VanPercy

Director Director
20 2019
CalBank
2019 21
CalBank
CORPORATE GOVERNANCE STATEMENT
Introduction
The CalBank Group is committed to fulfilling its corporate governance obligations and responsibilities in the best interests
of all stakeholders by ensuring that its policies and practices reflect high standards of corporate governance practices
based on fairness, transparency and accountability. We remain committed to the continual strengthening of governance
within the Group, reflecting our efforts toward building a sustainable business in accordance with our long-term strategic
objectives.
CalBank Limited (the “Bank”), which is the parent company of the Group, has CalBrokers Limited (Resigned from the
GSE), CAL Asset Management Limited, CalBank Nominee Limited and CalTrustee Company Limited as subsidiaries, each
subsidiary company having an independent Board of Directors.
Compliance and Regulations

Compliance with applicable legislation, regulations, standards and codes remains an essential characteristic of the Group’s
culture. The Board of Directors of the Bank monitors compliance with these by means of management reports. Information
on the outcomes of any significant interaction with key stakeholders such as the Bank’s regulators is also provided to the
Board.
The Group complies with all applicable legislation, regulations, standards and codes in Ghana.
The Board
The Board of Directors of the Bank (the “Board”) is the ultimate decision-making body for the Group. It has overall
responsibility for management of the business and affairs of the Group, the establishment of Group strategy and the
allocation and raising of resources and is accountable to shareholders for financial and operational performance. The Board
provides effective leadership, considers strategic issues, ensures the Group manages risk effectively through approving
and monitoring the Group’s risk appetite and exercises judgement in guiding management to achieve growth and deliver
long-term, sustainable shareholder value.
The Board of Directors is currently made up of ten non-executive directors and one executive director. The Group is
committed to ensuring that the composition of the Board continues to include Directors who bring an appropriate mix of
skills, experience and diversity to Board decision-making in both current and emerging issues.
The roles of the Board Chairman and Managing Director are distinct and separate, with a clear division of responsibilities.
The Chairman leads the Board and ensures the effective engagement and contribution of all executive and non-executive
directors. The Managing Director has responsibility for all Group businesses and acts in accordance with the authority
delegated by the Board. Responsibility for the development of policy and strategy and operational management is
delegated to the Managing Director.
All directors participate in discussing strategy, performance, financial and risk management issues of the Group, and
meetings of the Board are structured to allow sufficient time for the consideration of all agenda items through constructive
deliberations.
In addition to its statutory responsibilities, as enshrined under the Companies Act, 2019 (Act 992), the Banks and
Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and the Constitution of the Bank, the Board is also guided by
a voluntary Board Charter adopted by the Bank, which sets out in further detail the individual duties and responsibilities of
the Chairman and members of the Board, the Company Secretary and the Board as a whole.
There is regular interaction between the Board and executive management. The Board holds scheduled meetings in
closed sessions and employees are invited, as required, to make presentations to the Board on material issues under
22 2019
CalBank
Corporate Governance Statement (Continued)
consideration. Directors are also provided with unrestricted access to management and company information, as well as
resources required to carry out their responsibilities.
Meetings of the Board are held quarterly, with an additional meeting to consider Group strategy. Additional meetings are
convened if necessary. All Directors are provided with comprehensive Board meeting documentation at least one week
prior to each scheduled meeting.
In 2019, 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 1/4 4/4 n/a

Philip Owiredu 5/6 n/a n/a n/a
Helen Nankani 6/6 4/4 4/4 2/2
Nana Otuo Acheampong 6/6 4/4 4/4 n/a
Rosalind Kainyah 5/6 n/a 4/4 2/2
Kofi Osafo-Maafo 5/6 3/4 4/4 2/2
Kweku Baa Korsah (appointed 8/5/2019) 3/6 n/a n/a n/a
Joe Rexford Mensah (appointed 1/1/2020) n/a n/a n/a n/a
Ben Gustave Barth (appointed 1/1/2020) n/a n/a n/a n/a
Solomon Asamoah (appointed 1/1/2020) n/a n/a n/a n/a
Richard Arkutu (appointed 1/1/2020) n/a n/a n/a n/a
Frank B. Adu, Jnr. (retired 31/12/2019) 6/6 n/a 4/4 2/2
Malcolmn Pryor (retired 31/12/2019) 6/6 3/4 4/4 2/2
Kobina Quansah (retired 31/12/2019) 6/6 4/4 4/4 2/2
*n/a- not applicable
Board effectiveness review

The Board conducts a periodic self-evaluation to assess itself against its objectives. The aim of the evaluation is to assist the
Board in improving its effectiveness. The evaluation process affords individual Board members the opportunity to evaluate
the Board as a whole, as well as their own performance, and to make recommendations for areas of improvement.
As outlined in the Board Charter and in accordance with good corporate governance principles, the Board has instituted
committees in the areas of Audit, Risk Management, Credit, Cyber and Information Security and Governance and
Compensation, to assist with the execution of the various responsibilities of the Board.
Audit Committee
The Audit Committee, which is made up of five non-executive directors, is chaired by Nana Otuo Acheampong. Members
include Mrs. Helen Nankani, Mr. Kofi Osafo-Maafo, Mr. Kweku B. Korsah and Mr. Solomon Asamoah, the last two
having replaced Mr. Malcomn Pryor and Dr. Kobina Quansah, who resigned as directors of the Bank at the end of the
year. Pursuant to regulatory requirements, Mr. Paarock VanPercy, the Board Chairman, stepped down from the Audit
Committee during the year but continues to serve on the Risk Management Committee.
The Audit Committee provides reasonable assurance that the Bank is compliant with relevant laws and regulations, is
conducting its affairs ethically and is maintaining effective control over employee conflicts of interest and fraud. The
Committee is also responsible for providing assurance that financial disclosures made by management reasonably reflect
the Bank’s financial position, operating results, plans and long-term commitments. The Committee, which meets quarterly,
provides a formal report to the Board at each quarterly meeting of the Board.
2019 23
CalBank
The Internal Auditor of the Bank reports directly to the Audit Committee and sits in all meetings of the Committee.
During the review period, the Audit Committee considered and discussed reports on control environment weaknesses,
their root causes, management responses and remediation actions.
External Auditor
The Audit Committee exercised oversight over the work undertaken by the external auditor, KPMG. During the year, the
Committee met with the external audit team, including the lead audit partner, to enable Committee members gain greater
insight into the challenges faced in the Group’s markets from an external audit perspective. The Committee discussed
with KPMG the business and financial risks and sought assurances that these risks had been properly addressed in the
audit strategy and plan that had been reviewed by the Committee. The Committee is satisfied that KPMG has allocated
sufficient experienced resources to address identified risks.
The Committee also scrutinized the audit process, the quality and experience of the audit partner, and the audit plan
which provided details of the number of years KPMG partners and senior team members have been involved in similar
audits. KPMG’s lead audit partner for CalBank has experience in auditing banks and understands the markets in which
the Group operates.
During the review period, the Bank continued the engagement of KPMG to support its Basel II/III implementation.
Risk Management Committee

The Risk Management Committee which is made up of six non-executive directors and one executive director is chaired
by Mr. Ben Barth with the following directors as members: Mr. Kofi Osafo-Maafo, Ms. Rosalind Kainyah, Mr. Richard
Arkutu, Mrs. Helen Nankani, Mr. Joe Rexford Mensah and Mr. Philip Owiredu as an ex-officio member. Mr. Frank B.
Adu, Jnr., Dr. Kobina Quansah and Mr. Malcolmn D. Pryor resigned as members of the Committee upon their retirements
from the Board.
The Committee, which meets and reports to the Board quarterly, has oversight responsibility for various risks associated
with the business of the Bank including credit, market and operational risks.
The Committee’s core functions are;
• monitor the execution of the Board’s risk strategy for different business and geographic markets of operation,
• monitor the effectiveness of the risk management organisational structure,
• advise management on the adoption and implementation of an appropriate risk management policy,
• keep under review the status and application of risk management responsibilities and accountabilities; and
• review and monitor any requirement for reporting on risk management to the Board.
Details of the risk management framework are presented in note 5 of this annual report.
The Committee, as part of the governance structure, has delegated the day-to-day risk management function of the Bank
to the Assets and Liability Management Committee (ALMC).
The ALMC is chaired by the Managing Director with Group Heads and some Heads of Departments as members. Its
purpose is to recommend policies and guidelines to the Board for the management of balance sheet growth; deposits,
advances and investments; foreign exchange activities and positions; and risks associated with exchange rates and liquidity.
24 2019
CalBank
Cyber and Information Security Committee

This Committee was approved and set up by the Board on August 1, 2019.
The primary objective of the Cyber and Information Security Committee is to act on behalf of the Board in fulfilling the
Board’s oversight responsibility with respect to the Bank’s cyber and information security risks and programmes.
The Committee’s core functions are to:
• Approve the annual and other work plans for cyber and information security, business continuity and disaster
recovery;
• Receive quarterly and/or immediate reports, as required, on significant cyber and information security incidents;
• Hold an annual discussion about the adequacy of the Bank’s cyber and information security policies and strategies;
• Ensure effective internal controls and risk management practices are implemented to achieve security, reliability,
availability, resiliency and recoverability; and
• Review high-level policies, procedures, relevant laws and regulations that can impact the Bank’s cyber and
information security systems.
The Committee is chaired by Mr. Kweku B. Korsah and has Mr. Solomon Asamoah, Mr. Richard Arkutu and Mr. Philip
Owiredu as members.
Credit Committee
This committee was set up and approved by the Board on 6th February 2020.
It is chaired by Mr. Richard Arkutu and has Nana Otuo Acheampong, Mr. Ben Barth and Mr. Solomon Asamoah as
members.
The overall authority for approving credit facilities rests with the Board. The Board has delegated to the Committee the
authority to review all credits above the threshold delegated to the management credit committee, due to the proven
knowledge and experience of Committee members in credit risk management. The Credit Committee recommends such
credits to the Board for approval.
The objective of the Board Credit Committee shall be to provide an independent credit risk management review including
but not limited to:
a) Review credit proposals requiring the Board of Directors approval and ratification;
b) Ensure that the Bank will grant loans and provide other credit products for legitimate and constructive purposes
consistent with the best interests of the Bank, its customers, its shareholders and the community within which it
operates;
c) Perform any other assignments relating to the management of credit risk in the Bank as may be delegated by the
Board.
Governance and Compensation Committee

The objectives of the Governance and Compensation Committee include the reviewing the appointments and compensation
of the executive and senior management and making recommendations to the Board for its consideration and approval.
During the year, the Committee met twice and discussed the executive remuneration structure and recommended it for
the Board’s approval.
The Committee is chaired by Ms. Rosalind Kainyah and has Nana Otuo Acheampong and Mr. Ben Barth as members with
Mr. Philip Owiredu serving as an ex-officio member. Dr. Kobina Quansah, Mr. Malcolmn D. Pryor and Mr. Frank B. Adu
Jnr resigned as members of the Committee upon their retirement from the Board.
2019 25
CalBank
Remuneration philosophy
The Group’s remuneration philosophy aligns with its core values, including growing our people and delivering value to
our shareholders. The philosophy continues to emphasise the fundamental value of our people and their role in ensuring
sustainable growth. This approach is crucial in an environment where skills remain scarce.
The Board of Directors sets the remuneration philosophy in line with approved business strategy and objectives. The
philosophy aims to maintain an appropriate balance between employee and shareholder interests. A key success factor for
the Bank is its ability to attract, retain and motivate the talent it requires to achieve its strategic and operational objectives
The following key factors have informed the implementation of reward policies and procedures that support the
achievement of business goals:
• the provision of rewards that enable the attraction, retention and motivation of employees and the development of a
high-performance culture;
• maintaining competitive remuneration in line with our markets, trends and required statutory obligations;
• moving to a cost-to-company remuneration structure;
• rewarding people according to their performance; and
• educating employees on the full employee value proposition.
Remuneration Structure
Non-executive directors
All non-executive directors are provided with a letter of appointment setting out the terms of their engagement. A third of
the directors are required to retire at each annual general meeting and may offer themselves for re-election in accordance
with the Companies Act, 2019 (Act 992) and the Bank’s Constitution. If recommended by the directors, the Board then
proposes their re-election to shareholders. The term of non-executive directors is governed by the Bank of Ghana
directive on corporate governance, which limits the maximum period of service for non-executive directors to nine years.
Non-executive directors receive fixed fees for serving on the Board and its sub-committees and includes a retainer fee
that has been determined in line with market practices. There are no contractual arrangements for compensation for loss
of office. Non-executive directors do not receive short-term incentives, nor do they participate in any long-term incentive
schemes.
The Board members’ remuneration is reviewed by the Governance and Compensation Committee and approved by the
shareholders on the recommendation of the Board.
Executive directors
The executive directors receive a remuneration package and qualify for long-term incentives on the same basis as other
employees. The components of their package are as follows:
• guaranteed remuneration - based on their market value and the role they play;
• annual performance-based bonus used to incentivize the achievement of group objectives; and
• a pension, which provides a competitive post-retirement benefit in accordance with group policy applicable to all
employees.
The remuneration of executive management is reviewed by the Governance and Compensation Committee and approved
by the Board.
26 2019
CalBank
Management
The terms and conditions of employment of managers are guided by the labour laws in Ghana and are aligned to best
practice. Managerial remuneration is based on a total cost-to-company structure comprising of a fixed cash portion,
compulsory benefits including medical aid and long-service award and optional benefits. Market data is used to benchmark
salary levels and benefits, which are reviewed annually. For all employees, performance-related payments have formed a
significant proportion of total remuneration. All employees (executives, managers and general staff) are individually rated
on the basis of performance and potential and this is used to influence actual performance-related remuneration.
Long-term incentives
It is essential for the Group to retain key skills over the long term which is done particularly through employee long-service
awards. The purpose of these is to align the interests of the Bank and its subsidiaries to that of the employees, as well as
to attract and retain skilled, competent people.
Induction of New Directors and Ongoing Development

New directors are provided with a letter of appointment and participate in a comprehensive induction program covering
the Group’s financial, strategic, operational and risk management overviews. Appointees are provided with an information
pack including governance policies and business information, and presentations are made on the Group’s business
functions and activities by key members of the executive and senior management teams.
During the year, as part of regulatory requirements for director certification, modular training sessions were held for the
Board on various corporate governance topics including: Corporate Governance in Perspective, Regulatory Response to
Corporate Governance Challenges in Banks and Financial Institutions and the Balance Sheet Framework for Board of
Directors.
More broadly, the directors are supported by management and have access to independent professional advice at the
Group’s expense where they judge it necessary to discharge their responsibilities as directors. Processes are also in place
to ensure the timely provision of information to directors.
Ethics and Organisational Integrity

The Group’s revised Code of Ethics is designed to empower employees and enable faster decision-making at all levels of
our business according to defined ethical principles. It also aims to ensure that, as a significant organisation in the financial
services industry, we adhere to the highest standards of responsible business practice. The Code interprets and defines
CalBank’s values in greater detail and provides values-based decision-making principles to guide our conduct. It is aligned
with other policies and procedures and supports the relevant industry regulations and laws of Ghana. The Code of Ethics
is made available to all staff annually and also published on the Group intranet.
Related Parties Transactions

The Group has in place policies and procedures to ensure that all related party transactions are carried out at arm’s length
and in accordance with the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930). This is intended to
ensure that there is no favourable treatment given to a related party.
Therefore, in any connected transactions or continuing connected transactions in the ordinary and usual course of
business, and on normal commercial terms with a related party or its associate, we ensure all the necessary approvals are
obtained prior to the execution of the transaction.
Conflict of Interest
Directors have a statutory duty not to place themselves in a position 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.
2019 27
CalBank
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 Bank has
granted indemnities to all of its directors on terms consistent with the applicable statutory provisions.
At no time during the year did any director hold a material interest in any contract of significance with the Bank or any
of its subsidiary undertakings. The Group is not party to any significant agreements that would automatically take effect,
alter or terminate following a change of control of the Bank. The Bank has established a robust process requiring directors
to disclose proposed outside business interests before any are entered into. This enables prior assessment of any conflict
or potential conflict of interest and any impact on time commitment. The Board reviews actual or potential conflicts of
interest annually.
Authorisations are reviewed annually by the Board to consider if they continue to be appropriate, and also to revisit the
terms upon which they were provided. The Board is satisfied that our processes continue to operate effectively.
Subject to the Companies Act, 2019 (Act 992), the respective Constitutions of the Group and the authority granted to
directors in general meetings, the directors may exercise all the powers of the Group and may delegate specific authority
to Committees. The Company’s regulations contain provisions relating to the appointment and removal of directors which
is also in accordance with the Companies Act, 2019 (Act 992) and best practices.
Subject to compliance with the provisions of the Corporate Governance Directive (2018), the Group does not place a
limitation on the number of other directorship positions any director can hold. However, any position taken up by a director
would have to be disclosed to the Board to ensure there are no conflict of interest issues. Executive directors are required
to inform the Board of any intention to take up any external directorship role for the Board’s consent prior to taking up
the formal appointment.
Material issues facing the Bank

There are no material issues facing the Bank.
28 2019
CalBank
2019 29
CalBank
SUSTAINABILITY REPORT
Introduction
Sustainable management of the Bank’s economic, social and environmental impacts and responsibilities are effectively
entrenched in the bank’s risk management culture through the emphasis we place on the application of the bank’s
vision and values in all our operations. CalBank believes environmental protection and social development are among
the most pressing issues facing the world today. The Bank therefore regards sustainable and social development as a
fundamental aspect of sound business management. Consequently, the Bank is committed to continuing the integration
of environmental and social management into its business activities and internal operations.
Sustainability at CalBank
The Bank first established an environmental and social management system (ESMS) and policy in 2009 which are
integrated into the credit assessment processes. Our ESMS policy includes sound objectivities and well-defined processes,
procedures and responsibilities to ensure optimal benefit from this policy. On the other hand, sustainable management of
the bank’s own operational footprints are guided by our Operational Risk Policy and Incident Management Framework
and supported by a Business Continuity Plan (BCP). Health and safety activities geared at empowering staff to maintain
the highest standards of safety at the workplace such as elevator evacuation and fire drills are provided on a continuous
basis engaging the support of competent state agencies such as the Fire Service.
We continuously improve upon our systems by providing the needed training to our staff. We also communicate with
our clients and provide the needed guidelines to ensure a healthy environment and social development. Our benchmarks
are local legislation as well as the Environmental and Social Policies and Guidelines of the World Bank Group and the
Conventions of the International Labour Organisation.
The Bank in 2019 signed up to the Ghana Sustainable Banking Principles (SBPs) and Sector Guidance Notes, a program
put in place by the Bank of Ghana with support from the Environmental Protection Agency and the Ghana Association
of Bankers, to assist Banks respond to emerging global issues. The principles are to assist banks respond to the emerging
global megatrend issues such as human security, anti-money laundering socially responsible stewardship, information
communication, environmental and climate change among others.
The principles are:

Principle 1 Identify, assess, mitigate and monitor environmental and social risks and opportunities in our business
activities;
Principle 2 Promote good environmental, social and governance practices in our internal business operations;
Principle 3 Promote good corporate governance and ethical standards;
Principle 4 Promote gender equality;
Principle 5 Promote financial inclusion;
Principle 6 Promote resource efficiency and sustainable consumption and production; and
Principle 7 Reporting.
CalBank has made a commitment to comply with the Sustainable Banking Principles and integrate them into its entire
range of products and services as well as in managing its operational footprints
Sustainable Management of our Internal Footprints

CalBank as a key Ghanaian indigenous financial institution takes very seriously its role in helping achieve the Sustainability
Development Goals (SDGs) by reducing its carbon footprint on the planet. We do this because of our commitments to the
SDGs and in compliance with sustainability goal requirements from our foreign institutional investors and DFIs.
The bank in conducting its internal operations employs use of equipment such as air-conditioners, generators, UPS,
AVRs, water treatment systems, water harvesting systems, fragrance management systems devoid of CFCs, thus saving
the environment as well as a waste management system aimed at promoting the agenda of waste recycling in our
environment.
30 2019
CalBank
The Bank has made significant specific investments towards achieving this goal of sustainability by introducing several
green features in the design of our recently constructed 15,200-square meter head office facility. The eco-friendly
12 storey CalBank Tower features eleven floors of offices, a state-of-the-art gymnasium, a 180 meter long running
track, a food court, towards the promotion of a healthy lifestyle and work environment for our staff, as well as a
400-seater amphitheatre and a 500KW Solar Farm. The Bank has been awarded an IFC EDGE Certification (LP7-
GHA-187091710042494) after subjecting the head-office building’s green credentials to an international green building
assessment, verification and certification process.
The key environmental features of the head office building are summarized below:
Features Objectives and Benefits
LED lighting through out the Eliminate exposure to some carcinogenic components; enhance
facility. longevity of lighting provisions and consume less power.
Motion sensors for lighting and Reduce power utilization especially when the various spaces are not in
water control. use and empty; conserve and prevent waste of water.
Water harvesting and Reduce dependence on the national supply with total water savings of
conservation. 56 % according to our EDGE certification.
Heat Gain Reduction Façade. Prevents heat gained in the building and therefore reduces the need
for cooling which would have required additional power.
Energy Use efficiency with Brings about a savings in power consumption by approximately 30%
zoned cooling (variable – 40%.
refrigerant volume (VRV)
system).
Renewable energy by the Energy savings at full capacity is currently approximately 30% without
installation of a 500KW Solar the provision of battery storage.
Farm.
Digitalization of Banking Services

Another sustainability-driven move embarked by the Bank is going paperless, a major aspect of which is the branch
digitalization project with an aim to digitalize and automate branch banking by removing and/or reducing paper work as
well as readjusting processes and procedures in an efficient manner. Staff have been trained to educate and encourage
customers to use the Bank’s plethora of distribution channels (ie, Mobile Banking, Internet Banking, ATM Banking, Agent
Banking, CalPay, CalApp, etc.) to reduce the human traffic in our banking halls while eliminating use of paper which is
the main aim of this initiatives.
2019 31
CalBank
Mainstream Sustainability in Credit / Lending Processes
CalBank ensures that:

• Environmental and Social (E&S) impacts of borrowers’ activities are assessed and E&S risk is categorized;
• Measures are identified based on E&S risk to avoid, mitigate and compensate for all environmental and social
impacts; and
• The implementation of the agreed measures that are included in the loan agreements are monitored and reported
throughout the term of the credit facility.
Category Risk Level Interpretation
A High Risks that are diverse, irreversible or considered sensitive

by the Bank; risks may affect an area broader than
the project/operational site and could lead to significant
changes in land use and in the social, physical and
biological environment Implement remote fuel and
meter monitoring across the bank
B Medium Projects with potential limited adverse E&S impacts that

are few, site specific, and for which mitigation measures
may be readily available
C Low Projects with minimal or no adverse environmental or

social impact thus requiring no EIA
The management of identified risks is done by ensuring that the projects have been duly licensed by the relevant
environmental protection and social institutions; issued with all ESMS permits and land title ownership documentation. The
ESMS team verifies authenticity of documents submitted with key ESMS authorities such as the Environmental Protection
Agency (EPA); Ghana National Fire Service (GNFS), National Petroleum Authority (NPA), Food and Drugs Authority (FDA)
among other regulatory authorities. Where the permits or licenses require renewal, the clients are required to submit
renewed permits / licenses.
We are required under the various funding agreements mostly with the DFIs to adhere to globally accepted ESMS
standards in our lending processes by ensuring our clients adherence to these standards. We are committed to ensure that
these are adhered to through a well laid out monitoring process with the full cooperation of our clients, corrective action
plans are developed where required and monitored through site visits and reporting.
Cal Green Finance Facility

CalBank allocated funds amounting to USD 32.5 million at competitive pricing for financing green projects. Projects
that qualify as green must either be classified as renewable energy (RE) or energy efficiency (EE) projects. The facility is
targeted at all existing categories of clients: individual, SME and corporate. Projects and businesses financed must lead to
a reduction in average energy consumption and reduction of Green House Gases or lead to use of renewable energy in
industries, SMEs, agribusiness, commercial services and household in Ghana through the utilization of eligible measures
and technologies.
To ensure the facility makes the desired impact, the facility guarantees:
• Competitive pricing compared to other products of the bank;
• Accessibility to funds dedicated towards green financing; and
• Access to advisory services on green projects.
32 2019
CalBank
Fire drill and evacuation exercise for all staff

at the Head-office as part of health and
safety awareness creation.
500KW Solar farm and heat gain reduction facade of the head office building.
2019 33
CalBank
INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF CALBANK LIMITED
Report on the Audit of the Financial Statements
Opinion
We have audited the consolidated and separate financial statements of CalBank Limited (“the Group and the Bank”), which
comprise the statements of financial position as at 31 December 2019, and the statements of comprehensive income,
changes in equity and cash flows for the year then ended, and the notes to the financial statements which include a
summary of significant accounting policies and other explanatory notes, as set out on pages 39 to 120.
In our opinion, the accompanying consolidated and separate financial statements give a true and fair view of the
consolidated and separate financial position of the Group and the Bank as at 31 December 2019, and of its consolidated
and separate financial performance and cash flows for the year then ended in accordance with International Financial
Reporting Standards (IFRSs) and in the manner required by the Companies Act, 2019 (Act 992) 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 consolidated and separate 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¢201.81million)

Refer to Note 21 to the consolidated and separate financial statements
The key audit matter How the matter was addressed in our audit
Loans and advances to customers amounted To address the key audit matter, we performed procedures including
to GH¢ 2,920 million at 31 December 2019 the following:
(GH¢2,428 million at 31 December 2018), and
- We evaluated the design and tested the operating effectiveness of
the total impairment allowance account for
the Bank amounted to GH¢201.81 million at key controls over:
31 December 2019 (GH¢174.25 million at 31
December 2018). • The internal credit management process to assess the loan quality
In connection with the implementation of IFRS classification used to identify impaired loans;
9 as from 1 January 2018, CalBank Limited • Implementation of the definition of default and significant increase
implemented a three stage expected credit loss in credit risk applied in calculating the modelled loan impairments;
impairment model as follows:
and
34 2019
CalBank
Independent Auditor’s Report (Continued)
• Recognition of allowances measured at an • The valuation of future cash flows, existence and valuation of
amount equal to 12-month expected credit collateral, based on the appropriate use of key parameters for the
losses (stage 1);
impairment allowance.
• Recognition of allowances measured at an
amount equal to the lifetime expected credit - Using our financial risk model specialist, we evaluated the
losses (ECL) for loans and advances for reasonableness of the model methodology and performed recalculation
which credit risk has significantly increased of the expected credit losses for a sample of loans.
since initial recognition, but that are not
- We tested input data in respect of the critical data elements,
credit-impaired (stage 2); and
challenged management assumptions and obtained reasonable
• Financial assets that are credit-impaired
(stage 3). explanations and evidence supporting the key model parameters
(including the significant increase in credit risk, PD, LGD and EAD).
The Bank determines loan impairments in - We tested the impact of macro-economic indicators in
stage 1 and 2 on a modelled basis whereas the
loan impairments in stage 3 are determined on estimating the probability of defaults.
a specific loan-by-loan basis. - We tested completeness and accuracy of the transfer of data
from underlying source systems to the expected loss calculations.
Judgements and estimation uncertainty
- Considering the inherent estimation risk of individually credit-
The judgements and estimation uncertainty impaired loans, we selected appropriate samples and considered
in the impairment allowance of loans and whether the key judgements and significant estimates applied in the
advances is primarily linked to the following
impairment were reasonable. This included the following procedures:
aspects:
• Significant increase in credit risk: judgement • assessed the external collateral valuations and the realisation
is required to transfer assets from stage 1 to periods for the collaterals used as a basis of forecasted cash flows;
stage 2;
and
• Forward-looking information: the Bank
includes forecasts of future events and • Recalculated the expected credit losses on the individually credit-
economic conditions (forward-looking impaired loans.
information) in the modelled loan • Furthermore, we assessed the adequacy of the disclosures,
impairments.
including disclosures on estimation uncertainty and judgements,
• Modelled loan impairments - For the
to assess compliance with the disclosure requirements of IFRS 7
modelled loan impairments the Bank
applies judgement in utilising point in time Financial Instruments Disclosures.
probability of default (PD), loss given default
(LGD) and exposure at default (EAD)
models for the majority of the loan portfolio
in estimating the ECL.
• Individually credit-impaired loans - For
credit-impaired loans that are assessed
on an individual basis, the impairment
allowance is based on the net present
value of expected future cash flows (based
on valuation of underlying collateral)
in a liquidation scenario. In such cases,
judgement is required for the estimation of
the expected future cash flows.
Given the combination of inherent subjectivity
and judgement involved in estimating the
expected credit losses and the material nature
of the balance, we considered the impairment
of loans and advances to be a key audit matter
in our audit of the consolidated and separate
financial statements.
Other Information
The Directors are responsible for the other information. The other information comprises the Corporate Information,
Report of the Directors as required by the Companies Act, 2019 (Act 992) and the Banks and Specialised Deposit-
Taking Institutions Act, 2016 (Act 930), the Chairman’s Report, the Managing Director’s Report, Corporate Governance
Statement but does not include the consolidated and separate financial statements and our auditor’s report thereon.
2019 35
CalBank
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.
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, 2019 (Act 992) 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, whether 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 intend 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 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 Directors.
• 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/or 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.
36 2019
CalBank
• 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.
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.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated and separate financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on Other Legal and Regulatory Requirements
Compliance with the requirements of Section 137 of the Companies Act, 2019 (Act 992) 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, so far as appears from our examination of those books.
The consolidated and separate statements of financial position and comprehensive income are in agreement with the
accounting records and returns.
We are independent of the Group and Bank under audit pursuant to Section 143 of the Companies Act, 2019 (Act 992).
The Group and Bank’s transactions were within their powers and the Group and Bank generally complied with the
relevant provisions of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
The Group and Bank have generally complied with the provisions of the Anti-Money Laundering Act, 2008 (Act 749), the
Anti-Terrorism Act, 2008 (Act 762) and all relevant Amendments and Regulations governing the Acts.
The engagement partner on the audit resulting in this independent auditor’s report is Labaran Amidu (ICAG/P/1472).
............................................................
FOR AND ON BEHALF OF:
KPMG: (ICAG/F/2020/038)
CHARTERED ACCOUNTANTS
13 YIYIWA DRIVE, ABELENKPE
P O BOX GP 242
ACCRA
27 February, 2020
2019 37
CalBank
38 2019
CalBank
STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER
2019 2018
Note Bank Group Bank Group

Interest Income calculated using effective interest rate method 9 911,283 912,409 772,751 773,270
Interest Expense 9 (394,955) (394,303) (356,762) (351,641)

Fees and Commissions Income 10 57,565 64,625 68,382 75,988
Fees and Commissions Expense 10 (18,028) (18,028) (6,445) (6,445)
Net Fees and Commissions 39,537 46,597 61,937 69,543

Net Trading Income 11 27,168 27,168 26,918 27,106
Net gains on derivative assets 33 4,115 4,115 - -
Other Operating Income 12 674 406 15,655 979
31,957 31,689 42,573 28,085

Operating Income 587,822 596,392 520,499 519,257

Net Impairment Loss on Financial Assets 21 (83,367) (86,066) (66,735) (66,735)
Personnel Expenses 13 (131,074) (134,579) (122,308) (125,364)
Depreciation and Amortisation 26,27 (20,806) (20,948) (11,674) (11,714)
Lease Expenses 28 (11,633) (11,633) - -
Other Expenses 14 (98,991) (100,226) (89,429) (92,538)
Total Operating Expenses (345,871) (353,452) (290,146) (296,351)

Profit Before Income Tax 241,951 242,940 230,353 222,906

Income Tax Expense 15 (67,666) (69,527) (67,413) (69,690)
Profit For The Year 174,285 173,413 162,940 153,216

Other Comprehensive Income, Net of Tax
Items that may be reclassified subsequently to profit or loss:

Fair value changes in financial assets at FVOCI 34v 9,027 9,027 (9,013) (9,013)

Items that will not be reclassified subsequently to profit or loss:
Revaluation surplus on Property and Equipment 34iii 41,110 41,110 - -
Remeasurement of defined benefit liability 34v 1,950 1,869 (1,742) (1,722)
Other Comprehensive Income for the year 52,087 52,006 (10,755) (10,735)
Total Comprehensive Income for the Year 226,372 225,419 152,185 142,481

Earnings per share (Ghana Cedis per share) 16
- Basic 0.2782 0.2772 0.2600 0.2449
- Diluted 0.2782 0.2772 0.2600 0.2449
The notes on pages 44 to 120 are an intergral part of these consolidated and separate financial statements.
2019 39
CalBank

STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER

2019 2018
Assets
Cash and Cash Equivalents 18 597,779 597,784 637,565 637,570
Non-Pledged Trading Assets 20 125,772 125,772 - -
Derivative Assets Held for Risk Management 33 4,115 4,115 - -
Investment Securities 19 2,704,295 2,710,691 1,799,439 1,815,912
Loans and Advances to Customers 21 2,920,026 2,920,026 2,428,002 2,422,952
Investments in Subsidiaries 22 2,038 - 2,038 -
Current Tax Assets 24 13,495 13,971 - 512
Property and Equipment 26 504,166 504,242 435,493 435,583
Intangible Assets 27 27,533 28,789 19,901 20,632
Right-of-use Lease Assets 28 87,236 87,236 - -
Deferred Tax Assets 25 5,705 5,788 14,891 15,075
Other Assets 23 47,620 50,084 68,527 71,063
Total Assets 7,039,780 7,048,498 5,405,856 5,419,299

Liabilities
Deposits From Banks and Other Financial Institutions 29 172,654 164,471 78,161 71,371
Deposits From Customers 30 3,694,513 3,694,513 3,078,682 3,078,682
Borrowings 31 2,028,126 2,028,126 1,319,932 1,319,932
Current Tax Liabilities 24 - - 7,273 7,301
Lease Liabilities 28 77,212 77,212 - -
Other Liabilities 32 106,408 109,389 157,236 162,568
Total Liabilities 6,078,913 6,073,711 4,641,284 4,639,854

Equity
Stated Capital 34i 400,000 400,000 400,000 400,000
Retained Earnings 174,819 189,473 58,140 73,666
Revaluation Reserve 34iii 104,636 104,636 63,526 63,526
Statutory Reserve 34ii 288,353 288,353 244,782 244,782
Credit Risk Reserve 34iv - - 16,042 16,042
Other Reserves 34v (6,941) (7,675) (17,918) (18,571)
Total Shareholders’ Equity 960,867 974,787 764,572 779,445

Total Liabilities and Shareholders’ Equity 7,039,780 7,048,498 5,405,856 5,419,299

Net Assets Value per Share (Ghana Cedis per Share) 1.5335 1.5557 1.2202 1.2440
(Net Assets Value per Share is defined as net assets divided by number of shares)

Philip Owiredu Paarock A. VanPercy

Director Director
The Directors approved the financial statements on 26 February 2020

40 2019
CalBank

STATEMENTS OF CHANGES IN EQUITY

Other
2019 Reserves
Retained Regulatory
Stated Statutory Revaluation Fair Value Total
The Bank Earnings Credit Risk
Capital Reserve Reserve Reserves Equity
Reserve
Balance at 1 January 2019 400,000 244,782 63,526 58,140 (17,918) 16,042 764,572
Total comprehensive income
Profit - - - 174,285 - - 174,285
Other comprehensive income, net of tax
Revaluation surplus on Property and Equipment - - 41,110 - - - 41,110
FVOCI financial assets - - - - 9,027 - 9,027
Remeasurement of defined benefit liability - - - - 1,950 - 1,950
Transactions with shareholders
Dividend paid - - - (30,077) - - (30,077)
Transfer to/from reserves
Statutory reserve - 43,571 - (43,571) - - -
Regulatory credit risk reserve - - - 16,042 - (16,042) -
Balance at 31 December 2019 400,000 288,353 104,636 174,819 (6,941) - 960,867
Other Reserves
Regulatory
Stated Statutory Revaluation Retained Treasury Fair Value Total
The Group Credit Risk
Capital Reserve Reserve Earnings Shares Reserves Equity
Reserve
Balance at 1 January 2019 400,000 244,782 63,526 73,666 (584) (17,987) 16,042 779,445
Profit - - - 173,413 - - -
173,413
Revaluation surplus on Property and Equipment - - 41,110 - - - - 41,110
FVOCI financial assets 9,027 9,027
Remeasurement of defined benefit liability - - - - - 1,869 - 1,869
Dividend paid - - -
(30,077) - - -
(30,077)
Statutory reserve - 43,571 - (43,571) - - - -
Regulatory credit risk reserve - - - 16,042 - - (16,042) -
Balance at 31 December 2019 400,000 288,353 104,636 189,473 (584) (7,091) - 974,787
2019 41
CalBank

Other
2018 Reserves
Retained Regulatory
Stated Statutory Revaluation Fair Value Total
The Bank Earnings Credit Risk
Capital Reserve Reserve Reserves Equity
Reserve
Balance at 1 January 2018 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 2018 100,000 163,312 63,526 275,883 (7,163) 34,783 630,341
Profit - - - 162,940 - - 162,940
FVOCI financial assets (9,013) (9,013)
Remeasurement of defined benefit liability - - - - (1,742) - (1,742)
Transfer to stated capital 300,00 - - (300,00) - - -
Dividend tax on Capital Increase - - - (17,954) - - (17,954)
Statutory reserve - 81,470 - (81,470) - - -
Regulatory credit risk reserve - - - 18,741 - (18,741) -
Balance at 31 December 2018 400,000 244,782 63,526 58,140 (17,918) 16,042 764,572
Other Reserves
Regulatory
Stated Statutory Revaluation Retained Treasury Fair Value Total
The Group Credit Risk
Capital Reserve Reserve Earnings Shares Reserves Equity
Reserve
Balance at 1 January 2018 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 2018 100,000 163,312 63,526 301,133 (518) (7,252) 34,783 654,984
Profit - - - 153,216 - - - 153,216
FVOCI financial assets - - - - - (9,013) - (9,013)
Remeasurement of defined benefit liability - - - - - (1,722) - (1,722)
Transfer to stated capital 300,000 - - (300,000) - - - -
Dividend tax on Capital Increase - - - (17,954) - - - (17,954)
Net Changes in Bank’s shares held by subsidiary - - - - (66) - - (66)
Statutory reserve - 81,470 - (81,470) - - - -
Regulatory credit risk reserve - - - 18,741 - - (18,741) -
Balance at 31 December 2018 400,000 244,782 63,526 73,666 (584) (17,987) 16,042 779,445
42 2019
CalBank

STATEMENTS OF CASH FLOWS

in thousands of Ghana Cedis 2019 2018
Cash From Operating Activities
Profit for the Year 174,285 173,413 162,940 153,216

Adjustments for:
Depreciation and Amortisation 26,27 20,806 20,948 11,674 11,714
Impairment on Financial Assets 21 83,367 86,066 66,735 66,735
Net Interest Income 9 (516,328) (518,106) (415,989) (421,629)
Net gains on derivative assets 33 (4,115) (4,115) - -
Income Tax Expense 15 67,666 69,527 67,413 69,690
Unrealised Exchange Loss 18,239 18,239 10,150 10,150
Profit on Disposal of Property and Equipment 26 (298) (298) (203) (203)
(156,378) (154,326) (97,280) (110,327)

Changes in:
Loans and Advances to Customers (570,337) (578,086) (574,328) (569,278)
Other Assets 10,883 10,869 (17,488) (15,978)
Deposits From Banks and Other Financial Institutions 90,248 88,855 (6,752) 1,949
Customer Deposits 625,172 625,172 650,481 650,481
Other Liabilities (50,235) (52,580) 38,791 42,783

Interest and Dividends Received 860,880 861,949 651,119 637,922
Interest Paid (391,715) (391,063) (366,471) (347,812)
Income Tax Paid (91,594) (93,462) (60,441) (62,794)
Net Cash Flow From Operating Activities 326,924 317,328 217,631 226,946

Cash Flows From Investing Activities
Purchase of Trading Assets (125,772) (125,772) - -
Purchase of Investment Securities (850,480) (840,403) (320,286) (328,820)
Purchase of Property and Equipment 26 (32,162) (32,118) (149,662) (149,707)
Proceeds From Sale of Property and Equipment 26 304 304 222 222
Purchase of Intangible Assets 27 (10,142) (10,667) (682) (1,413)
Net Cash Used in Investing Activities (1,018,252) (1,008,656) (470,408) (479,718)

Cash Flows from Financing Activities
Dividends Paid (30,077) (30,077) - -
Proceeds from Borrowings 1,246,209 1,246,209 844,437 844,437
Repayment of Borrowings (546,351) (546,351) (456,321) (456,321)
Net Cash Flow from Financing Activities 669,781 669,781 388,116 388,116

Net (Decrease)/Increase in Cash and Cash Equivalents (21,547) (21,547) 135,339 135,344
Cash and Cash Equivalents at 1 January 637,565 637,570 512,376 512,376
Effect of exchange rate fluctuations (18,239) (18,239) (10,150) (10,150)
Cash and Cash Equivalents at 31 December 18 597,779 597,784 637,565 637,570
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NOTES TO THE FINANCIAL STATEMENTS

FOR
THE YEAR ENDED 31 DECEMBER 2019
(All currency amounts in the notes are in thousands of Ghana Cedis unless otherwise stated)
1. REPORTING ENTITY
CalBank Limited (The “Bank”) is a Bank incorporated in Ghana. The address and registered office of the Bank can be
found on page 5 of the annual report. The Bank operates with a Universal Banking license that allows it to undertake
Banking and related activities. These consolidated financial statements as at and for the year ended 31 December 2019
comprise the Bank and its subsidiaries, (together referred to as the ‘Group’). The separate financial statements as at and
for the year ended 31 December 2019 comprise the financial statements of the Bank.
The Bank is listed on the Ghana Stock Exchange (GSE).
2. BASIS OF PREPARATION
2.1. Statement of compliance
The consolidated and separate financial statements (financial statements) have been prepared in accordance with
International Financial Reporting Standards (IFRS) and its interpretations issued by the International Accounting Standards
Board (IASB) and in the manner required by the Companies Act 2019, (Act 992), and the Banks and Specialised Deposit-
Taking Institutions Act, 2016 (Act 930).
2.2. Basis of measurement

The financial statements are prepared on the historical cost basis except for the following assets and liabilities that are
stated at their fair value: financial instruments at fair value through profit or loss and financial instruments classified as fair
value through other comprehensive income (FVOCI), leasehold land and buildings carried at revalued assets, derivative
assets held for risk management measured at fair value.
2.3. Functional and presentation currency

The financial statements are presented in Ghana Cedis, which is the Bank’s functional currency. Except otherwise
indicated, financial information presented in Ghana Cedis have been rounded to the nearest thousand.
2.4. Use of estimates and judgement

The preparation of financial statements in conformity with IFRS requires management to make judgment, estimates and
assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses.

The estimates and associated assumptions are based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis of making the judgement about carrying values
of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if 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.
2.5. Information about significant estimation, uncertainty and critical judgements

Accounting policies, estimates and judgements that have the most significant effect on the amounts recognised in the
financial statement are described in note 4 and 6.
2.6. Presentation of financial statements

The Bank presents its statement of financial position in order of liquidity. An analysis regarding recovery or settlement within
12 months after the reporting date (current) and more than 12 months after the reporting date (non–current) is presented
in note 5.3.
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position only
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis,
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Notes To The Financial Statements (Continued)
or to realise the assets and settle the liability simultaneously. Income and expenses are not offset in the statements of
comprehensive income unless required or permitted by any accounting standard or interpretation, and as specifically disclosed
in the accounting policies of the Group and Bank.
3. CHANGES IN ACCOUNTING POLICIES

The Group and the Bank has initially adapted IFRS 16 from 1 January 2019. A number of other new standards are also
effective from 1 January 2019 but do not have a material effect on the Group and Bank financial statements.
3.1. Leases
The group for the first time has applied IFRS 16 Leases issued by the IASB effective 1 January, 2019 in the preparation
of its accounts.
The group adopted the modified retrospective approach in transitioning from the previous standard (IAS 17 Leases) to the
new standard. Accordingly, comparative information for 2018 have not been restated and continues to be reported under
IAS 17 and IFRIC 4.
Prior to adopting IFRS 16, the group treated leases based on IAS 17. Under IAS 17, group categorized leases into Operating
and Finance lease depending on whether all the risks and rewards incidental to the lease have been transferred from the
lessor to the group.
The group and Bank adopted the transition option that does not require any adjustment to retained earnings at 1 January
2019.
Except for the changes above, the Group has consistently applied the accounting policies as set out in the annual report
to all periods presented in these consolidated and separate financial statements.
3.2. Definition of a lease

A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. Control is conveyed where the customer has both the right to direct the identified asset’s use
and to obtain substantially all the economic benefits from that use
On transition to IFRS 16, the group elected to apply certain practical expedients in its assessment of which transaction
are leases.
3.3. The Group as a lessee

As a lessee the group leases some branch and office premises and ATM spaces. Previously, the group classified these
leases as operating leases under IAS 17 based on its assessment of whether the lease transferred substantially all of the
risks and rewards incidental to ownership of the underlying asset to the Group. Under IFRS 16, the group recognizes
right-of-use assets and lease liabilities for leases of branch and office premises unless where relevant exceptions have
been applied for low value leases and short term leases.
On transition for these leases, lease liabilities were measured at the present value of the remaining lease payments,
discounted at the Group’s incremental borrowing rate as at 1 January, 2019.
The right-of-use asset were measured as the leases liability recognized at 1 January, 2019 and adjusted by any prepayment
existing at the date of transition.
The group used a number of practical expedients when applying IFRS 16 to leases previously classified as operating leases
under IAS 17. The following practical expedients were applied;
• Right-of-use asset and lease liability were not recognized for low value leases (leases with monthly lease payment
below the cedi equivalent of USD 1,000.00)
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• Initial direct costs were excluded from measuring the right of use asset at the date of initial application.
• Prepayment existing at the date of initial application that were to exhaust within less than 12 months were not
capitalized as part of ROU asset at the date of initial application.
• All lease payment made in a year are assumed to have been made from the beginning of the year.
• The group were guided by history in determining the lease term.
3.4. Impact on financial statement

The group and Bank adopted the transition option that does not require any adjustment to retained earnings at 1 January
2019.
4. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial statements,
and have been applied consistently by Group entities except for IFRS 16.
4.1. Basis of Consolidation
4.1.1. Subsidiaries
The consolidated financial statements comprise the financial statements of the Bank and its subsidiaries as at 31 December
2019. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an
investee if, and only if, the Group has:
• Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the
investee)
• Exposure, or rights, to variable returns from its involvement with the investee
• The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when
the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
• The contractual arrangement with the other vote holders of the investee
• Rights arising from other contractual arrangements
• The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control
over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of
a subsidiary acquired or disposed off during the year are included in the consolidated financial statements from the date
the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent
of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit
balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies
in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Group are eliminated in full on consolidation. The financial statements
of the subsidiaries used to prepare the consolidated financial statements were prepared as of the Bank’s reporting date.
In the separate financial statements, investments in subsidiaries are accounted for at cost less impairment. Cost also
includes direct attributable costs of investment.

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4.1.2. Funds Management
The Group manages and administers assets held in unit trust or other investment vehicles on behalf of investors. The
financial statements of these entities are not included in these consolidated and separate financial statements. Information
about the group’s fund management activities are set out in note 34.
4.2. Foreign Currency

Foreign currency transactions and end of day balances are translated into the functional currency using the published
average inter-bank exchange rates by the Bank of Ghana prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions, and from the translation at year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies, are recognised in the statement of profit or loss.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional
currency at the spot exchange rate at the date on which the fair value is determined. Non-monetary items that are
measured based on historical cost in foreign currency are translated using spot rate at the date of translation.

4.3. Recognition of interest income
4.3.1. The effective interest rate

Interest income is recorded using the effective interest (EIR) method for all financial instruments measured at amortised
cost and financial instruments designated at Fair Value through Profit or Loss (FVPL). Interest income on interest bearing
financial assets measured at FVOCI are also recorded by using the EIR method. The EIR is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial instrument or, when appropriate, a shorter period,
to the net carrying amount of the financial asset.
The EIR (and therefore, the amortised cost of the asset) is calculated by taking into account any discount or premium
on acquisition, fees and costs that are an integral part of the EIR. Hence, it recognises the effect of potentially different
interest rates charged at various stages, and other characteristics of the product life cycle (including prepayments, penalty
interest and charges).
If expectations regarding the cash flows on the financial asset are revised for reasons other than credit risk, the adjustment
is booked as a positive or negative adjustment to the carrying amount of the asset in the statement of financial position
with an increase or reduction in interest income. The adjustment is subsequently amortised through Interest and similar
income in the statement of comprehensive income.
4.3.2. Interest and similar income

The Group calculates interest income by applying the EIR to the gross carrying amount of financial assets other than
credit-impaired assets.
When a financial asset becomes credit-impaired and is, therefore, regarded as ‘Stage 3’, the Bank calculates interest
income by applying the effective interest rate to the net amortised cost of the financial asset. If the financial assets cures
and is no longer credit-impaired, the Bank reverts to calculating interest income on a gross basis.
For purchased or originated credit-impaired (POCI) financial assets the Bank calculates interest income by calculating the
credit-adjusted EIR and applying that rate to the amortised cost of the asset. The credit-adjusted EIR is the interest rate
that, at original recognition, discounts the estimated future cash flows (including credit losses) to the amortised cost of the
POCI assets.
Interest income on all trading assets and financial assets mandatorily required to be measured at FVPL is recognised using
the contractual interest rate in net trading income.

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4.4. Fees and commissions

Fees and commission income and expenses that are an integral part of the effective interest rate on financial instruments
are included in the measurement of the effective interest rate.
Other fees and commission income, including account servicing fees, investment management fees, sales commission,
placement and arrangement fees and syndication fees are recognised as the related services are performed.

Other fees and commission expense relates mainly to transaction and service fees, which are expensed as the services
are received.

4.5. Trading Income
Income arises from the margins which are achieved through market-making and customer business and from changes
in market value caused by movements in interest and exchange rates, equity prices and other market variables. Trading
positions are held at fair value and the resulting gains and losses are included in profit or loss, together with interest and
dividends arising from long and short positions and funding costs relating to trading activities.

4.6. Dividends
Dividend income is recognised when the right to receive income is established. Usually this is the ex-dividend date for
equity securities. Dividends are reflected as a component of other operating income. Dividend payable is recognised as a
liability in the period in which they are declared.
4.7. Other Operating Income

Other operating income comprises other income including gains or losses arising on fair value changes in trading assets
and liabilities.

4.8. Income tax expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to
the extent that it relates to items recognised directly in other comprehensive income (OCI) or equity, in which case it is
recognised in OCI or equity.
4.8.1. Current Taxation

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the statement of financial position date, and any adjustment to tax payable in respect of previous years. The
Group provides for income taxes at the current tax rates on the taxable profits of the Group.
4.8.2. Deferred Taxation

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the corresponding amounts used for taxation purposes. However, deferred tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred tax is measured at tax rates that are expected to be applied to temporary differences when they reverse, using
tax rates enacted or substantively enacted at the reporting date. A deferred tax asset is recognised only to the extent that
it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit
will be realised.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets,
and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis or the tax assets and liabilities will be realised simultaneously.
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Deferred tax is provided using the statement of financial position method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial
recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting
nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse
in the foreseeable future.
4.8.3. Levies and similar charges

The Group recognises the liability arising from levies and similar charges when it becomes legally enforceable.
4.9. Financial Assets and Liabilities
4.9.1. Date of recognition

Financial assets and liabilities, with the exception of loans and advances to customers and deposit from customers, banks
and other financial institutions are initially recognised on the trade date, i.e., the date that the Bank becomes a party to the
contractual provisions of the instrument. This includes regular way trades: purchases or sales of financial assets that require
delivery of assets within the time frame generally established by regulation or convention in the market place. Loans
and advances to customers are recognised when funds are transferred to the customers’ accounts. The Bank recognises
deposit from customers, banks and other financial institutions when funds are transferred to the Bank.
4.9.2. Initial measurement of financial instruments

Financial asset or liability is measured initially at fair value plus, for an item not at FVTPL, transaction costs that are directly
attributable to its acquisition or issue. When the fair value of financial instruments at initial recognition differs from the
transaction price, the Bank accounts for the Day 1 profit or loss, as described below.
4.9.3. Day 1 profit or loss

When the transaction price of the instrument differs from the fair value at origination and the fair value is based on a
valuation technique using only inputs observable in market transactions, the Bank recognises the difference between the
transaction price and fair value in net trading income. In those cases where fair value is based on models for which some
of the inputs are not observable, the difference between the transaction price and the fair value is deferred and is only
recognised in profit or loss when the inputs become observable, or when the instrument is derecognised.
4.9.4. Classification and Measurement categories of financial assets and liabilities

The Group classifies all of its financial assets based on the business model for managing the assets and the asset’s
contractual terms, measured at either:
• Amortised cost.
• Fair value through other comprehensive income (FVOCI).
• Fair Value through Profit or Loss (FVPL).
The Group may designate financial instruments at FVPL, if so doing eliminates or significantly reduces measurement or
recognition inconsistencies, as explained in note 4.9.9.
Financial liabilities, other than loan commitments and financial guarantees, are measured at amortised cost or at FVPL
when they are held for trading and derivative instruments or the fair value designation is applied, as explained in note
4.9.10.
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4.9.5. Loans and advances to customers, Financial investments at amortised cost

The Bank only measures Due from banks, Loans and advances to customers and other financial investments at amortised
cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding. The details of these conditions are outlined below:
4.9.5.1. Business model assessment

The Bank determines its business model at the level that best reflects how it manages groups of financial assets to achieve
its business objective.
The Bank’s business model is not assessed on an instrument-by-instrument basis, but at a higher level of aggregated
portfolios and is based on observable factors such as:
• How the performance of the business model and the financial assets held within that business model are evaluated
and reported to the entity’s key management personnel
• The risks that affect the performance of the business model (and the financial assets held within that business model)
and; in particular, the way those risks are managed
• How managers of the business are compensated (for example, whether the compensation is based on the fair value of
the assets managed or on the contractual cash flows collected)
• The expected frequency, value and timing of sales are also important aspects of the Bank’s assessment
The business model assessment is based on reasonably expected scenarios without taking ‘worst case’ or ‘stress case’
scenarios into account. If cash flows after initial recognition are realised in a way that is different from the Bank’s original
expectations, the Bank does not change the classification of the remaining financial assets held in that business model,
but incorporates such information when assessing newly originated or newly purchased financial assets going forward.
4.9.5.2. The SPPI test

As a second step of its classification process the Bank assesses the contractual terms of financial instrument to identify
whether they meet the SPPI test.
‘Principal’ for the purpose of this test is defined as the fair value of the financial asset at initial recognition and may change
over the life of the financial asset (for example, if there are repayments of principal or amortisation of the premium/
discount).
The most significant elements of interest within a lending arrangement are typically the consideration for the time value
of money and credit risk. To make the SPPI assessment, the Bank applies judgement and considers relevant factors such
as the currency in which the financial asset is denominated, and the period for which the interest rate is set.
In contrast, contractual terms that introduce a more than de minimis exposure to risks or volatility in the contractual cash
flows that are unrelated to a basic lending arrangement do not give rise to contractual cash flows that are solely payments
of principal and interest on the amount outstanding. In such cases, the financial asset is required to be measured at FVPL.
4.9.6. Financial assets or financial liabilities held for trading

The Bank classifies financial assets or financial liabilities as held for trading when they have been purchased or issued
primarily for short-term profit making through trading activities or form part of a portfolio of financial instruments that
are managed together, for which there is evidence of a recent pattern of short-term profit taking. Held-for-trading assets
and liabilities are recorded and measured in the statement of financial position at fair value. Changes in fair value are
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recognised in net trading income. Interest and dividend income or expense is recorded in net trading income according to
the terms of the contract, or when the right to payment has been established.
Included in this classification are debt securities, equities, short positions and customer loans that have been acquired
principally for the purpose of selling or repurchasing in the near term.
4.9.7. Equity instruments at profit or loss

Upon initial recognition, the Bank occasionally elects to classify irrevocably some of its equity investments as equity
instruments at FVOCI and are not held for trading. Such classification is determined on an instrument-by-instrument basis.
Gains and losses on these equity instruments are never recycled to profit. Dividends are recognised in profit or loss as
other operating income when the right of the payment has been established. Equity instruments at FVOCI are not subject
to an impairment assessment.
4.9.8. Debt issued and other borrowed funds

After initial measurement, debt issued and other borrowed funds are subsequently measured at amortised cost. Amortised
cost is calculated by taking into account any discount or premium on issue funds, and costs that are an integral part of
the EIR. A compound financial instrument which contains both a liability and an equity component is separated at the
issue date.
The Bank issues financial instruments with equity conversion rights, write-down and call options. When establishing
the accounting treatment for these non-derivative instruments, the Bank first establishes whether the instrument is
a compound instrument and classifies such instrument’s components separately as financial liabilities, financial assets,
or equity instruments in accordance with IAS 32. Classification of the liability and equity components of a convertible
instrument is not revised as a result of a change in the likelihood that a conversion option will be exercised, even when
exercising the option may appear to have become economically advantageous to some holders. When allocating the
initial carrying amount of a compound financial instrument to the equity and liability components, the equity component
is assigned as the residual amount after deducting from the entire fair value of the instrument, the amount separately
determined for the liability component. The value of any derivative features (such as a call options) embedded in the
compound financial instrument, other than the equity component (such as an equity conversion option), is included in the
liability component. Once the Bank has determined the split between equity and liability, it further evaluates whether the
liability component has embedded derivatives that must be separately accounted for.
4.9.9. Financial assets and financial liabilities at fair value through profit or loss
Financial assets and financial liabilities in this category are those that are not held for trading and have been either
designated by management upon initial recognition or are mandatorily required to be measured at fair value under IFRS
9. Management only designates an instrument at FVPL upon initial recognition when one of the following criteria are met.
Such designation is determined on an instrument-by-instrument basis:
• The designation eliminates, or significantly reduces, the inconsistent treatment that would otherwise arise from
measuring the assets or liabilities or recognising gains or losses on them on a different basis or;
• The liabilities and assets have their performance evaluated on a fair value basis, in accordance with a documented risk
management or investment strategy or;
• The liabilities and assets contain one or more embedded derivatives, unless they do not significantly modify the cash
flows that would otherwise be required by the contract, or it is clear with little or no analysis when a similar instrument
is first considered that separation of the embedded derivative(s) is prohibited
Financial assets and financial liabilities at FVPL are recorded in the statement of financial position at fair value. Changes
in fair value are recorded in statement of comprehensive income with the exception of movements in fair value of
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liabilities designated at FVPL due to changes in the Bank’s own credit risk. Such changes in fair value are recorded in the
fair value reserve through OCI and do not get recycled to the profit or loss. Interest earned or incurred on instruments
designated at FVPL is accrued in interest income or interest expense, respectively, using the EIR, taking into account
any discount/ premium and qualifying transaction costs being an integral part of instrument. Interest earned on assets
mandatorily required to be measured at FVPL is recorded using EIR as explained in note 4.3.1. Dividend income from
equity instruments measured at FVPL is recorded in profit or loss as other operating income when the right to the
payment has been established.
4.9.10. Financial guarantees, letters of credit and undrawn loan commitments

The Bank issues financial guarantees, letters of credit and loan commitments. Financial guarantees are initially recognised
in the financial statements (within Provisions) at fair value, being the premium received. Subsequent to initial recognition,
the Bank’s liability under each guarantee is measured at the higher of the amount initially recognised less cumulative
amortisation recognised in the statement of comprehensive income, guarantee, and an ECL provision as set out in the
financial statement
The premium received is recognised in the statement of comprehensive income in Net fees and commission income on
a straight line basis over the life of the guarantee.
Undrawn loan commitments and letters of credits are commitments under which, over the duration of the commitment,
the Bank is required to provide a loan with pre-specified terms to the customer. These contracts are in the scope of the
ECL requirements of IFRS 9.
The nominal contractual value of financial guarantees, letters of credit and undrawn loan commitments, where the loan
agreed to be provided is on market terms, are not recorded on in the statement of financial position. The nominal values
of these instruments together with the corresponding ECLs are disclosed in the financial statement
The Bank occasionally issues loan commitments at below market interest rates drawdown. Such commitments are
subsequently measured at the higher of the amount of the ECL allowance and the amount initially recognised less, when
appropriate, the cumulative amount of income recognised as outlined the financial statement.
4.10. Reclassification of financial assets and liabilities

The Bank may reclassify its financial assets subsequent to their initial recognition subject to a business model assessment.
During the year, investment securities previously classified as FVOCI were reclassified as securities at amortised cost.
Financial liabilities are never reclassified by the Bank.
4.11. Derecognition of financial assets and liabilities
4.11.1. Derecognition due to substantial modification of terms and conditions
The Bank derecognises a financial asset, such as a loan to a customer, when the terms and conditions have been
renegotiated to the extent that, substantially, it becomes a new loan, with the difference recognised as a derecognition
gain or loss, to the extent that an impairment loss has not already been recorded. The newly recognised loans are classified
as Stage 1 for ECL measurement purposes, unless the new loan is deemed to be POCI.
When assessing whether or not to derecognise a loan to a customer, amongst others, the Bank considers the following
factors:
• Change in currency of the loan
• Introduction of an equity feature
• Change in counterparty
• If the modification is such that the instrument would no longer meet the SPPI criterion
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If the modification does not result in cash flows that are substantially different, the modification does not result in
derecognition. Based on the change in cash flows discounted at the original EIR, the Bank records a modification gain or
loss, to the extent that an impairment loss has not already been recorded.
4.11.2. Derecognition other than for substantial modification
4.11.2.1. Financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
derecognised when the rights to receive cash flows from the financial asset have expired. The Bank also derecognises the
financial asset if it has both transferred the financial asset and the transfer qualifies for derecognition.
The Bank has transferred the financial asset if, and only if, either:
• The Bank has transferred its contractual rights to receive cash flows from the financial asset or;
• It retains the rights to the cash flows, but has assumed an obligation to pay the received cash flows in full without
material delay to a third party under a ‘pass–through’ arrangement
Pass-through arrangements are transactions whereby the Bank retains the contractual rights to receive the cash flows of
a financial asset (the ‘original asset’), but assumes a contractual obligation to pay those cash flows to one or more entities
(the ‘eventual recipients’), when all of the following three conditions are met:
• The Bank has no obligation to pay amounts to the eventual recipients unless it has collected equivalent amounts from
the original asset, excluding short-term advances with the right to full recovery of the amount lent plus accrued interest
at market rates
• The Bank cannot sell or pledge the original asset other than as security to the eventual recipients
• The Bank has to remit any cash flows it collects on behalf of the eventual recipients without material delay. In addition,
the Bank is not entitled to reinvest such cash flows, except for investments in cash or cash equivalents including
interest earned, during the period between the collection date and the date of required remittance to the eventual
recipients.
A transfer only qualifies for derecognition if either:
• The Bank has transferred substantially all the risks and rewards of the asset or;
• The Bank has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset
The Bank considers control to be transferred if and only if, the transferee has the practical ability to sell the asset in
its entirety to an unrelated third party and is able to exercise that ability unilaterally and without imposing additional
restrictions on the transfer.
When the Bank has neither transferred nor retained substantially all the risks and rewards and has retained control of the
asset, the asset continues to be recognised only to the extent of the Bank’s continuing involvement, in which case, the
Bank also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that
reflects the rights and obligations that the Bank has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration the Bank could be required to pay.
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If continuing involvement takes the form of a written or purchased option (or both) on the transferred asset, the continuing
involvement is measured at the value the Bank would be required to pay upon repurchase. In the case of a written put
option on an asset that is measured at fair value, the extent of the entity’s continuing involvement is limited to the lower
of the fair value of the transferred asset and the option exercise price.
4.11.2.2. Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original
liability and the recognition of a new liability. The difference between the carrying value of the original financial liability and
the consideration paid is recognised in profit or loss.
4.12. Impairment of financial assets
4.12.1. Overview of the ECL principles

The Bank records the allowance for expected credit losses for all loans and other debt financial assets not held at FVPL,
together with loan commitments and financial guarantee contracts, in this section all referred to as ‘financial instruments’.
Equity instruments are not subject to impairment under IFRS 9.
The ECL allowance is based on the credit losses expected to arise over the life of the asset, the lifetime expected credit
loss (LTECL), unless there has been no significant increase in credit risk since origination, in which case, the allowance is
based on the 12 months’ expected credit loss (12mECL) as outlined in note 4.12.2. The Bank’s policies for determining if
there has been a significant increase in credit risk are set out in the financial statement.
The 12mECL is the portion of LTECLs that represent the ECLs that result from default events on a financial instrument
that are possible within the 12 months after the reporting date.
Both LTECLs and 12mECLs are calculated on either an individual basis or a collective basis, depending on the nature of
the underlying portfolio of financial instruments.
The Bank has established a policy to perform an assessment, at the end of each reporting period, of whether a financial
instrument’s credit risk has increased significantly since initial recognition, by considering the change in the risk of default
occurring over the remaining life of the financial instrument.
Based on the above process, the Bank groups its loans into Stage 1, Stage 2, Stage 3 and POCI, as described below:
• Stage 1: When loans are first recognised, the Bank recognises an allowance based on 12m ECLs. Stage 1 loans also
include facilities where the credit risk has improved and the loan has been reclassified from Stage 2.
• Stage 2: When a loan has shown a significant increase in credit risk since origination, the Bank records an allowance
for the LTECLs. Stage 2 loans also include facilities, where the credit risk has improved and the loan has been
reclassified from Stage 3.
• Stage 3: Loans considered credit-impaired. The bank records an allowance for the LTECLs.
• POCI: Purchased or originated credit impaired (POCI) assets are financial assets that are credit impaired on initial
recognition. POCI assets are recorded at fair value at original recognition and interest income is subsequently recognised
based on a credit-adjusted EIR. ECLs are only recognised or released to the extent that there is a subsequent change
in the expected credit losses.
For financial assets for which the Bank has no reasonable expectations of recovering either the entire outstanding
amount, or a proportion thereof, the gross carrying amount of the financial asset is reduced. This is considered a (partial)
derecognition of the financial asset.
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4.12.2. The calculation of ECLS

The Bank calculates ECLs based on a four probability-weighted scenarios to measure the expected cash shortfalls,
discounted at an approximation to the EIR. A cash shortfall is the difference between the cash flows that are due to an
entity in accordance with the contract and the cash flows that the entity expects to receive.
The mechanics of the ECL calculations are outlined below and the key elements are, as follows
• PD The Probability of Default is an estimate of the likelihood of default over a given time horizon. A default may only
happen at a certain time over the assessed period, if the facility has not been previously derecognised and is still in the
portfolio.
• EAD The Exposure at Default is an estimate of the exposure at a future default date, taking into account expected
changes in the exposure after the reporting date, including repayments of principal and interest, whether scheduled by
contract or otherwise, expected drawdowns on committed facilities, and accrued interest from missed payments.
• LGD The Loss Given Default is an estimate of the loss arising in the case where a default occurs at a given time. It
is based on the difference between the contractual cash flows due and those that the lender would expect to receive,
including from the realisation of any collateral. It is usually expressed as a percentage of the EAD.
When estimating the ECLs, the Bank considers four scenarios (a base case, an upside, a mild downside (‘downside 1’) and
a more extreme downside (‘downside 2’). Each of these is associated with different PDs, EADs and LGDs, as set out in
note 4.12.5. When relevant, the assessment of multiple scenarios also incorporate how defaulted loans are expected to
be recovered, including the probability that the loans will cure and the value of collateral or the amount that might be
received for selling the asset.
With the exception of credit cards and other revolving facilities, for which the treatment is separately set out in note 4.12.5,
the maximum period for which the credit losses are determined is the contractual life of a financial instrument unless the
Bank has the legal right to call it earlier. Impairment losses and releases are accounted for and disclosed separately from
modification losses or gains that are accounted for as an adjustment of the financial asset’s gross carrying value.
The mechanics of the ECL method are summarised below:
• Stage 1: The 12m ECL is calculated as the portion of LTECLs that represent the ECLs that result from default events
on a financial instrument that are possible within the financial statement months after the reporting date. The Bank
calculates the 12m ECL allowance based on the expectation of a default occurring in the 12 months following the
reporting date. These expected 12-month default probabilities are applied to a forecast EAD and multiplied by the
expected LGD and discounted by an approximation to the original EIR. This calculation is made for each of the four
scenarios, as explained above.
• Stage 2: When a loan has shown a significant increase in credit risk since origination, the Bank records an allowance
for the LTECLs. The mechanics are similar to those explained above, including the use of multiple scenarios, but
PDs and LGDs are estimated over the lifetime of the instrument. The expected cash shortfalls are discounted by an
approximation to the original EIR
• Stage 3: For loans considered credit-impaired the Bank recognises the lifetime expected credit losses for these loans.
The method is similar to that for Stage 2 assets, with the PD set at 100%.
• POCI: POCI assets are financial assets that are credit impaired on initial recognition. The Bank only recognises the
cumulative changes in lifetime ECLs since initial recognition, based on a probability-weighting of the four scenarios,
discounted by the credit adjusted EIR.
• Loan commitments and letters of credit: When estimating LTECLs for undrawn loan commitments, the Bank
estimates the expected portion of the loan commitment that will be drawn down over its expected life. The ECL is then
based on the present value of the expected shortfalls in cash flows if the loan is drawn down, based on a probability-
weighting of the four scenarios. The expected cash shortfalls are discounted at an approximation to the expected EIR
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on the loan for credit cards and revolving facilities that include both a loan and an undrawn commitment, ECLs are
calculated and presented together with the loan. For loan commitments and letters of credit, the ECL is recognised
within provisions.
• Financial guarantee contracts: The Bank’s liability under each guarantee is measured at the higher of the amount
initially recognised less cumulative amortisation recognised in the statement of comprehensive income, and the
ECL provision. For this purpose, the Bank estimates ECLs based on the present value of the expected payments to
reimburse the holder for a credit loss that it incurs The shortfalls are discounted by the risk-adjusted interest rate
relevant to the exposure. The calculation is made using a probability-weighting of the four scenarios. The ECLs related
to financial guarantee contracts are recognised within provisions.
4.12.3. Debt instruments measured at fair value through OCI

The ECLs for debt instruments measured at FVOCI do not reduce the carrying amount of these financial assets in
the statement of financial position, which remains at fair value. Instead, an amount equal to the allowance that would
arise if the assets were measured at amortised cost is recognised in OCI as an accumulated impairment amount,
with a corresponding charge to profit or loss. The accumulated loss recognised in OCI is recycled to the statement of
comprehensive income upon derecognition of the assets.
4.12.4. Purchased or originated credit impaired financial assets (POCI)

For POCI financial assets, the Bank only recognises the cumulative changes in LTECL since initial recognition in the loss
allowance.
4.12.5. Forward looking information

In the Bank’s ECL models, the Bank relies on a broad range of forward looking information as economic inputs, such as:
• GDP growth
• Unemployment rates
• Exchange rates
• Central Bank policy rates
• House price indices
The inputs and models used for calculating ECLs may not always capture all characteristics of the market at the date of
the financial statements. To reflect this, qualitative adjustments or overlays are occasionally made as temporary adjustments
when such differences are significantly material.
4.13. Collateral valuation

To mitigate its credit risks on financial assets, the Bank seeks to use collateral, where possible. The collateral comes in
various forms, such as cash, securities, letters of credit/guarantees, real estate, receivables, inventories, other non-financial
assets and credit enhancements such as netting agreements. Collateral, unless repossessed, is not recorded on the Bank’s
statement of financial position. However, the fair value of collateral affects the calculation of ECLs. It is generally assessed,
at a minimum, at inception and re-assessed on a quarterly basis. However, some collateral, for example, cash or securities
relating to margining requirements, is valued daily.
To the extent possible, the Bank uses active market data for valuing financial assets held as collateral. Other financial
assets which do not have readily determinable market values are valued using models. Non-financial collateral, such as
real estate, is valued by licensed professional property valuers.
4.14. Collateral repossessed

The Bank’s policy is to determine whether a repossessed asset can be best used for its internal operations or should be
sold. Assets determined to be useful for the internal operations are transferred to their relevant asset category at the lower
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of their repossessed value or the carrying value of the original secured asset. Assets for which selling is determined to be
a better option are transferred to assets held for sale at their fair value (if financial assets) and fair value less cost to sell
for non-financial assets at the repossession date in, line with the Bank’s policy.
In its normal course of business, the Bank does not physically repossess properties or other assets in its retail portfolio, but
engages external agents to recover funds, generally at auction, to settle outstanding debt. Any surplus funds are returned
to the customers/obligors. As a result of this practice, the residential properties under legal repossession processes are not
recorded on the statement of financial position.
4.15. Impairment losses on financial assets

The measurement of impairment losses both under IFRS 9 and IAS 39 across all categories of financial assets requires
judgement, in particular, the estimation of the amount and timing of future cash flows and collateral values when
determining impairment losses and the assessment of a significant increase in credit risk. These estimates are driven by a
number of factors, changes in which can result in different levels of allowances.
The Bank’s ECL calculations are outputs of complex models with a number of underlying assumptions regarding the
choice of variable inputs and their interdependencies. Elements of the ECL models that are considered accounting
judgements and estimates include:
• The Bank’s internal credit grading model, which assigns PDs to the individual grades
• The Bank’s criteria for assessing if there has been a significant increase in credit risk and so allowances for financial
assets should be measured on a LTECL basis and the qualitative assessment
• The segmentation of financial assets when their ECL is assessed on a collective basis
• Development of ECL models, including the various formulas and the choice of inputs
Determination of associations between macroeconomic scenarios and, economic inputs, such as unemployment levels
and collateral values, and the effect on PDs, EADs and LGDs
• Selection of forward-looking macroeconomic scenarios and their probability weightings, to derive the economic inputs
into the ECL models
4.16. Cash and cash equivalents

For the purposes of the statement of cash flow, cash and cash equivalents comprise cash on hand, cash and balances with
the Central Bank of Ghana and amounts due from banks and other financial institutions.
4.17. Investment Securities

This comprises investments in short-term Government securities and medium term investments in Government and other
securities such as open market operations (OMO) instruments, treasury bills and bonds. Investments in securities are
categorised as FVTPL or Amortised cost.
4.18. Property and Equipment

4.18.1. Recognition and measurement
Items of Property and Equipment are measured at cost or revalued amount less accumulated depreciation and any
accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour and any other costs directly attributable to bringing the asset to a working
condition for intended use. Purchased software that is integral to the functionality of the related equipment is capitalised
as part of that equipment.
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When parts of an item of property or equipment have different useful lives, they are accounted for as separate items
(major components) of Property and Equipment.
The Bank owns landed properties that are revalued every three years. Increases in the carrying amount arising on
revaluation are credited to revaluation reserves. Decreases that offset previous increases of the same asset are charged
against the revaluation reserves.
4.18.2. Subsequent costs

The cost of replacing part of an item of property or equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured
reliably. The costs of the day-to-day servicing of Property and Equipment are recognised in the statement of profit or
loss as incurred.

4.18.3. Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item
of Property and Equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. Under
IAS 17 land is not depreciated.
The estimated useful lives for the current and comparative periods are as follows:
Leasehold Buildings - over the remaining life of the lease

Motor Vehicles - 5 to 7 years
Equipment - 5 to 10 years
Furniture and fittings - 5 to 7 years

Depreciation methods, useful lives and residual values are reassessed at the reporting date.
Gains and losses on disposal of property and equipment are determined by comparing proceeds from disposal with the
carrying amounts of property and equipment and are recognised in profit or loss as other operating income.

4.19. Intangible assets
4.19.1. Software
Software acquired by the Group is measured at cost less accumulated amortisation and accumulated impairment losses.

Subsequent expenditure on software assets is capitalised only when it increases the future economic benefits embodied
in the specific asset to which it relates. All other expenditure is expensed as incurred. Amortisation is recognised in profit
or loss on a straight-line basis over the estimated useful life of the software, from the date that it is available for use. The
estimated useful life of software is ten years.
4.20. Events After Reporting Date

Events after reporting date are reflected in the financial statements only to the extent that they relate to the year under
consideration and the effect is material.
4.21. Deposits, amounts due to Banks and borrowings

This is mainly made up of customer deposit accounts, overnight placements by banks and other financial institutions and
medium term borrowings. They are categorised as other financial liabilities measured in the statement of financial position
at amortised cost.
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4.22. Provisions/Contingent Liabilities

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can
be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a rate that reflects current market assessments
of the time value of money and, where appropriate, the risks specific to the liability.

Contingent liabilities are possible obligations whose existence will be confirmed only by uncertain future events or present
obligations where the transfer of economic benefit is uncertain or cannot be reliably measured. Contingent liabilities are
not recognised but are disclosed unless they are remote.
4.23. Financial guarantees

Financial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss
it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument.

Financial guarantees are initially recognised at their fair value being the premium received, and the fair value is amortised
over the life of the financial guarantee. The financial guarantees are subsequently carried at the higher of the amount
initially recognised less cumulative amortisation recognised in profit or loss, and the best estimate of expenditure required
to settle any financial obligation arising as a result of the guarantee. Any increase in the liability is recorded in of profit or
loss. The premium received in the consolidated statement of profit or loss in net fees and commission income on a straight
line basis over the life of the guarantee.

4.24. Employee benefits
4.24.1. Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognised as an expense in the statement of profit
or loss when they are due.

4.24.2. Termination benefits
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility
of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date. Termination benefits
for voluntary redundancies are recognised if the Group has made an offer encouraging voluntary redundancy, it is probable
that the offer will be accepted, and the number of acceptances can be estimated reliably.

4.24.3. Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service
is provided.

4.24.4 Long service award
The Group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating
the amount of future benefit that employees have earned in return for their service in the current and prior periods; that
benefit is discounted to determine its present value, and any unrecognised past service costs. The discount rate is the yield
at the reporting date on a long-dated instrument on the Ghana market. The calculation is performed using the projected
unit credit method. Changes in the fair value of the plan liabilities are recognised in the statement of comprehensive
income.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee
and the obligation can be estimated reliably.
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4.25. Impairment on non-financial assets

The carrying amount of the Group’s non-financial assets other than deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable
amount is estimated.
An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. The recoverable
amount of an asset is the greater of its value in use and its fair value less costs to sell. Impairment losses are recognised
in profit or loss. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates
used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised.
4.26. Share capital
4.26.1 Share issue costs

Incremental costs directly attributable to the issue of new shares or options or the acquisition of a business are shown in
equity as a deduction, net of tax, from the proceeds.
4.26.2. Dividends on ordinary shares

Dividends on ordinary shares are recognised in equity in the period in which they are paid or, if earlier, approved by the
shareholders of the bank.
4.26.3 Treasury shares

Where the Company or any member of the Group purchases the Company’s shares, the consideration paid is deducted
from shareholders’ equity as treasury shares until they are cancelled. Where such shares are subsequently sold or reissued,
any consideration received is included in shareholders’ equity.
4.27. Segment Reporting

An operating segment is a component of an entity:
• that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses
relating to transactions with other components of the same entity)
• whose operating results are reviewed regularly by the entity’s senior management to make decisions about resources to
be allocated to the segment and assess its performance and
• for which discrete financial information is available

4.28. Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Bank after adjustments for preference dividends by
the weighted average number of ordinary shares outstanding during the period. The Bank has no convertible notes and
share options, which could potentially dilute its EPS and therefore the Group’s Basic and diluted EPS are essentially the
same.
4.29. Leases
The group has applied IFRS 16 adopting the Modified retrospective approach and therefore the comparative information
has not been restated and continues to be reported under IAS 17 nd IFRIC 4.
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4.29.1. Policy Applicable from 1 January, 2019.

At the inception of a contract, the group assesses whether the contract is, or contains a lease. This assessment is done
based on the definition of lease set in in IFRS 16. The standard determines whether a contract contains a lease on the
basis of whether the customer has the right to control the use of an identified asset for a period of time in exchange for
consideration.
This policy is applied to contracts entered into (or changed) on or after 1 January, 2019.
4.29.2. The Group as a Lessee

The Group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which
it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low
value assets.
4.29.3. Initial Recognition and Measurement

Leases are recognized when they meet the definition set out in IFRS 16. The right of use asset is initially measured at
cost, comprising the initial amount of lease liability adjusted for any lease payment made at or prior to commencement
date, plus any initial direct cost plus estimate of the cost to dismantle and remove any improvement made to branches
or office premise less any lease incentives received. However, the lease liability is measured as the present value of
outstanding lease payments (both fixed and variable payments), residual value guarantees, exercise price of purchase
options and termination benefits if any. The discount rate used is the interest rate implicit in the lease. Where this cannot
be readily determined the Group’s incremental borrowing rate is used. The Group determines its incremental borrowing
rate by analysing its borrowing from various external sources and makes certain adjustments to reflect the nature of the
lease and type of asset leased.
4.29.4. Subsequent Measurement

The right of use asset is subsequently depreciated on a straight line basis from the commencement date to the end of the
lease term unless the initial recognition considers the exercise of a purchase option or the lease transfers the ownership
of the underlying to the group by the end of the lease term. In which case, the right of use asset is amortized over the
useful life of the underlying asset. Additionally, the right of use asset is periodically reduced by impairment losses, if any,
and adjusted for certain re-measurements of the lease liability.
Lease liability is subsequently measured at amortized cost using the effective interest method. It is re-measured when
there is a change in the original assessment of the lease term, a change in the estimate of residual guarantee or a change
in index or rate affecting payments or a change in the fixed lease payment. When the lease liability is re-measured in this
way the carrying amount of the right of use asset is adjusted by the same amount or is recorded in profit or loss if the
carrying amount of the right of use asset has been reduced to zero.
The group determines its incremental borrowing rate by analyzing its borrowings from various external sources with
relevant adjustments to reflect the terms of the lease.
The group presents the right-of-use assets separately under ‘Assets’ and lease liability under ‘Liabilities’.
4.29.5. Short term Leases and Low value leases

The group has elected not to recognize right-of-use asset and lease liability for leases of low value assets and short term
leases. Lease payments in respective of these lease are recognized as expenses in the profit or loss statement.
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4.29.6. Policy applicable before 1st January, 2019

Prior to adopting IFRS 16, the group treated leases based on IAS 17. Under IAS 17, group categorized leases into Operating
and Finance lease depending on whether all the risks and rewards incidental to the lease have been transferred from the
lessor to the group. The group did not have any finance leases under 1AS 17.
Assets held under the operating leases were classified as operating leases and were not recognized in the Group’s
statement of financial position. Payments made under operating leases were recognized in profit or loss on a straight
line basis over the term of the lease. Lease incentives for the agreement of a new or renewed operating lease were
recognized by the group as a reduction of the rental expense over the lease term, irrespective of the incentive’s nature
or form, or the timing of payments.
4.30. Derivatives held for risk management purpose and hedge accounting
Derivatives held for risk management purposes include all derivatives assets and liabilities that are not classified as trading
assets or liabilities. Derivatives held for risk management purposes are measured at fair value in the statement or financial
position.
The Bank designates certain derivatives held for risk management as hedging instruments in qualifying hedging relationships.
On initial designation of the hedge, the Bank formally documents the relationship between the hedging instruments(s) and
hedged item(s), including the risk management objective and strategy in undertaking the hedge, together with the method
that will be used to assess the effectiveness of the hedging relationship.
The Bank makes an assessment, both at inception of the hedge relationship and on an ongoing basis, of whether the
hedging instrument(s) is (are) expected to be highly effective in offsetting the changes in the fair value or cash flows of
the respective hedged item(s) during the period for which the hedge is designated, and whether the actual results of each
hedge are within acceptable profitable range.
The Bank makes an assessment for a cash flow hedge of a forecast transaction, of whether the forecast transaction is
highly probable to occur and presents an exposure to variations on cash flows that could ultimately affect profit or loss.
These hedging relationships are discussed below.
4.30.1. Cash flow hedges

When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a
particular risk associated with a recognized asset or liability that could affect profit or loss, the effective portion of changes
in the fair value of the derivative is recognized in OCI and presented in the hedging reserve within equity. Any ineffective
portion of changes in the fair value of the derivative is recognized immediately in profit or loss. The amount recognized in
OCI is reclassified to profit or loss as a reclassification adjustment in the same period as the hedged cash flows affected
profit or loss as a reclassification adjustment in the same period as the hedged cash flows affect profit or loss, and in the
same line item in the statement of profit or loss and OCI.
If the hedging derivative expires or is sold, terminated, or exercised, or the hedge no longer meets the criteria for cash flow
hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued prospectively. However, of
the derivative is novated to a central counterparty by both parties as a consequence of laws or regulations without changes
in its term except for those that are necessary for the novation, then derivative is not considered as expired or terminated.
4.30.2. Other non-trading derivatives

If a derivative is not held for trading, and is not designated in a qualifying hedge relationship, then all changes in its fair
value are recognized immediately in profit or loss as a component or net income from other financial instruments at fair
value through profit or loss.
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4.31. Standards issued but not yet effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of
the Group’s financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when
they become effective.
4.31.1. IFRS 17 Insurance contracts

In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a comprehensive new accounting standard for
insurance contracts, covering recognition and measurement, presentation and disclosure. Once effective, IFRS 17 will
replace IFRS 4 Insurance Contracts (IFRS 4). IFRS 17 applies to all types of insurance contracts (i.e., life, non-life, direct
insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain guarantees and
financial instruments with discretionary participation features. IFRS 17 is effective for reporting periods beginning on or
after 1 January 2021, with comparative figures required. This standard is not applicable to the Group.
4.31.2. Amendments to IFRS 3: Definition of a Business

In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business Combinations to
help entities determine whether an acquired set of activities and assets is a business or not. They clarify the minimum
requirements for a business, remove the assessment of whether market participants are capable of replacing any missing
elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a
business and of outputs, and introduce an optional fair value concentration test. New illustrative examples were provided
along with the amendments. Since the amendments apply prospectively to transactions or other events that occur on or
after the date of first application, the Group will not be affected by these amendments on the date of transition.
4.31.3. Amendments to IAS 1 and IAS 8: Definition of Material

In October 2018, the IASB issued amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors to align the definition of ‘material’ across the standards and to clarify
certain aspects of the definition. The new definition states that, ’Information is material if omitting, misstating or obscuring
it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make
on the basis of those financial statements, which provide financial information about a specific reporting entity.’
The amendments to the definition of material is not expected to have a significant impact on the Bank’s consolidated
financial statements.
5. FINANCIAL RISK MANAGEMENT

5.1. Introduction and overview
The Group has exposure to the following risks from its use of financial instruments:
•credit risk •liquidity risk •market risk

•operational risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and
processes for measuring and managing risk, and the Group’s management of capital.
5.1.1. Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
The Risk Management Committee of the Board assists the Board in carrying out this responsibility. To enable it achieve
its purpose, the Committee:
• Reviews and monitors aggregate risk levels in the business and the quality of risk mitigation and controls
for all areas of risk to the business
• Makes recommendations to management on areas of improvement
• Informs the Board of progress in implementing improvements.
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The Board has also established the Asset and Liability Management Committee (ALCO) and Risk Management Department
which are responsible for developing and monitoring risk management policies in their specified areas.
The risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed
regularly to reflect changes in market conditions, products and services offered. The Group, through its training and
management standards and procedures, aims to develop a disciplined and constructive control environment, in which all
employees understand their roles and obligations.
The Audit Committee of the Board is responsible for monitoring compliance with the risk management policies and
procedures, and for reviewing the adequacy of the risk management framework in relation to the risks faced by the Group.
The Audit Committee is assisted in these functions by Internal Audit and Internal Control Departments. Internal Audit and
Internal Control undertake both regular and ad-hoc reviews of risk management controls and procedures, the results of
which are reported to the Audit Committee.
All Board committees are made up of non-executive members, with executives in attendance. The committees report
regularly to the Board of Directors on their activities.
5.2. Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Group’s loans and advances to customers and other banks and
investment securities. For risk management reporting purposes, the Group considers and consolidates all elements of credit
risk exposure (such as individual obligor default risk and sector risk).
5.2.1. Management of credit risk

The Board of Directors has delegated responsibility for the day-to-day management of credit risk to the Credit Department
and the overall management of credit risk to the Risk Management Department. These departments report to the Board
on a quarterly basis.
These departments responsibilities includes:
• Formulating credit policies in consultation with business units, covering collateral requirements, credit assessment, risk
grading and reporting, documentary and legal procedures, and compliance with regulatory and statutory requirements.
• Establishing the authorisation structure for the approval and renewal of credit facilities. Authorisation limits are
allocated to approving authorities of the group. Larger facilities require approval by the Credit Committee or the Board
of Directors as appropriate.
• Reviewing and assessing all credit exposures prior to facilities being committed to customers by the business unit
concerned. Renewals and reviews of facilities are subject to the same review process.
• Limiting concentrations of exposure to counterparties and industries (for loans and advances), and by issuer, credit
rating band and market liquidity.
• Developing and maintaining risk grading in order to categorise exposures according to the degree of risk of financial
loss faced and to focus management on the attendant risks. The risk grading system is used in determining where
impairment provisions may be required against specific credit exposures. The current risk grading framework reflects
the varying degrees of risk of default and the availability of collateral or other credit risk mitigation. The responsibility
64 2019
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for setting risk grades lies with the final approving authority.
Risk grades are subject to regular reviews by the Credit department.
• Reviewing compliance of business units with agreed exposure limits, including those for selected industries and
product types. Regular reports are provided to loan review committee on the credit quality of loan portfolio and
appropriate corrective action is taken.
• Providing advice, guidance and specialist skills to business units to promote best practice throughout in the management
of credit risk.
Each business unit is required to implement Group credit policies and procedures. Each business unit reports on all credit
related matters to management. Each business unit is responsible for the quality and performance of its credit portfolio
and for monitoring and controlling all credit risks in its portfolios.
The Risk Management Department monitors and manages the Group’s global credit risk within the appetite approved
by the Board and set as limits and controls within the Bank’s Risk Management Policy statement. It also promotes and
supports the development of good credit risk management practices.
Regular audits of business units and credit processes are undertaken by Internal Audit.
5.2.2. Impaired loans and securities

Impaired loans and securities are loans and securities for which it has been determined that it is probable that it will be
unable to collect all principal and interest due according to the contractual terms of the loan/securities agreement(s).
5.2.3. Past due but not impaired

Loans and securities where contractual interest or principal payments are past due but it is believed that impairment is not
appropriate on the basis of the level of security / collateral available and / or the stage of collection of amounts owed.
5.2.4. Significant increase in credit risk The Group monitors all financial assets that are subject to impairment
requirements to assess whether there has been a significant increase in credit risk since initial recognition. If there has been
a significant increase in credit risk the Bank will measure the loss allowance based on lifetime rather than 12m ECL.

5.2.5. Internal credit risk rating
In order to minimise credit risk, the Group has tasked its credit department to develop and maintain the Group’s credit
risk grading to categorise exposures according to their degree of risk of default. The Group’s credit risk grading framework
comprises eight categories. The credit rating information is based on a range of data that is determined to be predictive
of the risk of default and applying experienced credit judgement.
The nature of the exposure and type of borrower are taken into account in the analysis. Credit risk grades are defined
using qualitative and quantitative factors that are indicative of risk of default.
The credit risk grades are designed and calibrated to reflect the risk of default as credit risk deteriorates. As the credit risk
increases the difference in risk of default between grades changes. Each exposure is allocated to a credit risk grade at
initial recognition, based on the available information about the counterparty.
All exposures are monitored and the credit risk grade is updated to reflect current information. The monitoring procedures
followed are both general and tailored to the type of exposure.
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The following data are typically used to monitor the Bank’s exposures:
• Payment record, including payment ratios and ageing analysis;

• Extent of utilisation of granted limit;
• Forbearances (both requested and granted);
• Changes in business, financial and economic conditions;
• Credit rating information supplied by external rating agencies;
• For retail exposures: internally generated data of customer behaviour, affordability metrics etc.; and
• For corporate exposures: information obtained by periodic review of customer files including audited financial
statements review, market data such as prices of credit default swaps (CDS) or quoted bonds where available,
changes in the financial sector the customer operates etc.
The Group uses credit risk grades as a primary input into the determination of the term structure of the PD for exposures.
The Bank collects performance and default information about its credit risk exposures analysed by jurisdiction or region
and by type of product and borrower as well as by credit risk grading. The information used is both internal and external
depending on the portfolio assessed.
The Group analyses all data collected using statistical models and estimates the remaining lifetime PD of exposures and
how these are expected to change over time. The factors taken into account in this process include macro-economic data
such as GDP growth, unemployment, benchmark interest rates and house prices.
The Group generates a ‘base case’ scenario of the future direction of relevant economic variables as well as a representative
range of other possible forecast scenarios. The Bank then uses these forecasts, which are probability-weighted, to adjust
its estimates of PDs.
The Group uses different criteria to determine whether credit risk has increased significantly per portfolio of assets. The
criteria used are both quantitative changes in PDs as well as changes in qualitative factors.
The internal risk grading scale is as follows:
Group’s Description of Average number

rating the grade of days outstanding
Grade A Current less than 30 days
Grade B Other Loans Especially Mentioned (OLEM) 30 to but less than 90 days
Grade C Sub-standard 90 days less than 180 days
Grade D Doubtful 180 days less than 360 days
Grade E Loss 360 days and above
Loan commitments are assessed along with the category of loan the Bank is committed to provide, i.e. commitments
to provide mortgages are assessed using similar criteria to mortgage loans, while commitments to provide a corporate
loan are assessed using similar criteria to corporate loans.
Irrespective of the outcome of the above assessment, the Group presumes that the credit risk on a financial asset has
increased significantly since initial recognition when contractual payments are more than 90 days past due unless the
Bank has reasonable and supportable information that demonstrates otherwise.
66 2019
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The Group has monitoring procedures in place to make sure that the criteria used to identify significant increases in
credit are effective, meaning that significant increase in credit risk is identified before the exposure is defaulted or when
the asset becomes 90 days past due.
The Group performs periodic back-testing of its ratings to consider whether the drivers of credit risk that led to default
were accurately reflected in the rating in a timely manner.

5.2.6. Incorporation of forward-looking information
The Group uses forward-looking information that is available without undue cost or effort in its assessment of
significant increase of credit risk as well as in its measurement of ECL.
The Group employs experts who use external and internal information to generate a ‘base case’ scenario of future
forecast of relevant economic variables along with a representative range of other possible forecast scenarios.
The external information used includes economic data and forecasts published by governmental bodies and monetary
authorities. The Group applies probabilities to the forecast scenarios identified. The base case scenario is the single
most-likely outcome and consists of information used by the Bank for strategic planning and budgeting.
The Group has identified and documented key drivers of credit risk and credit losses for each portfolio of financial
instruments and, using a statistical analysis of historical data, has estimated relationships between macro-economic
variables and credit risk and credit losses. The Bank has not made changes in the estimation techniques or significant
assumptions made during the reporting period.
Predicted relationships between the key indicators and default and loss rates on various portfolios of financial assets
have been developed based on analysing historical data over the past years.

5.2.7. Measurement of ECL
The key inputs used for measuring ECL are:
• probability of default (PD);
• loss given default (LGD); and
• exposure at default (EAD).
As explained above these figures are generally derived from internally developed statistical models and other historical
data and they are adjusted to reflect probability-weighted forward-looking information. PD is an estimate of the
likelihood of default over a given time horizon. It is estimated as at a point in time.
The calculation is based on statistical rating models, and assessed using rating tools tailored to the various categories of
counterparties and exposures. These statistical models are based on market data (where available), as well as internal
data comprising both quantitative and qualitative factors. PDs are estimated considering the contractual maturities of
exposures and estimated prepayment rates.
The estimation is based on current conditions, adjusted to take into account estimates of future conditions that will
impact PD. LGD is an estimate of the loss arising on default. It is based on the difference between the contractual
cash flows due and those that the lender would expect to receive, taking into account cash flows from any collateral.
The LGD models for secured assets consider forecasts of future collateral valuation taking into account sale discounts,
time to realisation of collateral, cross-collateralisation and seniority of claim, cost of realisation of collateral and cure
rates (i.e. exit from non-performing status). LGD models for unsecured assets consider time of recovery, recovery rates
and seniority of claims.
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The calculation is on a discounted cash flow basis, where the cash flows are discounted by the original EIR of the loan.
EAD is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after
the reporting date, including repayments of principal and interest, and expected drawdowns on committed facilities.
The Group’s modelling approach for EAD reflects expected changes in the balance outstanding over the lifetime of
the loan exposure that are permitted by the current contractual terms, such as amortisation profiles, early repayment
or overpayment, changes in utilisation of undrawn commitments and credit mitigation actions taken before default.
The Group uses EAD models that reflect the characteristics of the portfolios. The Group measures ECL considering
the risk of default over the maximum contractual period (including extension options) over which the entity is exposed
to credit risk and not a longer period, even if contact extension or renewal is common business practice. However, for
financial instruments such as, revolving credit facilities and overdraft facilities that include both a loan and an undrawn
commitment component, the Bank’s contractual ability to demand repayment and cancel the undrawn commitment
does not limit the Bank’s exposure to credit losses to the contractual notice period.
For such financial instruments the Group measures ECL over the period that it is exposed to credit risk and ECL would
not be mitigated by credit risk management actions, even if that period extends beyond the maximum contractual
period. These financial instruments do not have a fixed term or repayment structure and have a short contractual
cancellation period.
However, the Group does not enforce in the normal day-to-day management the contractual right to cancel these
financial instruments. This is because these financial instruments are managed on a collective basis and are cancelled
only when the Group becomes aware of an increase in credit risk at the facility level. This longer period is estimated
taking into account the credit risk management actions that the Group expects to take to mitigate ECL, e.g. reduction
in limits or cancellation of the loan commitment.
5.2.8. Credit quality analysis

The Group monitors credit risk per class of financial instrument. The following table sets out information about
the credit quality of financial assets measured at amortised cost, FVOCI debt investments FVTPL financial assets.
Unless specifically indicated, for financial assets, the amounts in the table represent gross carrying amounts. For
loan commitments and financial guarantee contracts, the amounts in the table represent the amounts committed or
guaranteed, respectively.
68 2019
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Group and Bank

2019
Stage 1 Stage 2 Stage 3 Total
Loans and advances to customers
Grade A 2,770,866 - - 2,770,866
Grade B - 3,801 36,378 40,179
Grade C - 2,967 148,194 151,161
Grade D - 7,201 68,147 75,348
Grade E - - 84,282 84,282
2,770,866 13,969 337,001 3,121,836
Loss allowance (21,098) (3,793) (176,919) (201,810)

Carrying amount 2,749,768 10,176 160,082 2,920,026
Loan Commitments
Grade A 54,712 - - 54,712
Loss allowance (181) - - (181)
Carrying amount 54,531 - - 54,531
Guarantees & Indemnities

Grade A 1,018 - - 1,018
Carrying amount 990 - - 990
Letters of credit
Grade A 45,955 - - 45,955
Investment Securities (FVTPL)

Grade A 2,704,144 - - 2,704,144
Carrying amount 2,704,144 - - 2,704,144

Investment Securities (FVOCI)
Grade A - - - -
Carrying amount - - - -
70 2019
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2018
Group and Bank
Stage 1 Stage 2 Stage 3 Total
Loans and advances to customers
Grade A 2,347,839 2,347,839
Grade B - 5,207 43,322 48,529
Grade C - 4,190 51,383 55,573
Grade D - 9,156 6,855 16,011
Grade E - 9,910 124,388 134,298
2,347,839 28,463 225,948 2,602,250
Loss allowance (17,767) (3,190) (153,291) (174,248)

Carrying amount 2,330,072 25,273 72,657 2,428,002
Loan Commitments
Grade A 228,551 - - 228,551
Guarantees & Indemnities

Grade A 168,337 - - 168,337
Letters of credit
Grade A 108,984 - - 108,984
Investment Securities (FVTPL)

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

Investment Securities (FVOCI)
Grade A 276,118 - - 276,118
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5.2.5. Loans with renegotiated terms

Loans with renegotiated terms are loans that have been restructured due to deterioration in the borrower’s financial
position and where the Group has made concessions that it would not otherwise consider. Once the loan is restructured
it remains in this category independent of satisfactory performance after restructuring.
5.2.10. Allowances for impairment

An allowance is established for impairment losses that represents its estimate of incurred losses in its loan portfolio. The main
components of this allowance are a specific loss component that relates to individually significant exposures, and a collective
loan loss allowance established for groups of homogeneous assets in respect of losses that have been incurred but have not
been identified on loans subject to individual assessment for impairment.
5.2.11. Write-off policy

The Group writes off a loan / security balance (and any related allowances for impairment losses) when loan review
committee determines that the loans / securities are uncollectible. This determination is reached after the loan or security
has been classified as “loss” for two consecutive years or to the extent a loan or security is considered irrecoverable and
it is decided that there is no realistic probability of recovery. All write-offs must be approved by the Board and Bank of
Ghana.
Set out below is an analysis of the gross amounts of loans written-off.
Loans and Advances Written-off

2019 2018
Balance at the beginning 279,838 279,838 217,528 217,528
Write-offs during the year 109,642 109,642 68,377 68,377
Recovery during the year (53,110) (53,110) (6,067) (6,067)
Balance at the end 336,370 336,370 279,838 279,838
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:
2019 2018
Cash and Cash Equivalents 597,779 597,784 637,565 637,570
Non-Pledged Trading Assets 125,772 125,772 - -
Investment Securities 2,704,295 2,710,691 1,799,439 1,815,912
Loans and Advances to Customers 2,920,026 2,920,026 2,428,002 2,422,952
Other Assets 47,620 50,084 68,527 71,063
6,395,492 6,404,357 4,933,533 4,947,497
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Credit collateral
The Group holds collateral against loans and advances to customers in the form of mortgage interests over property, other
registered securities over assets, and guarantees. Estimates of fair value are based on the value of collateral assessed at the
time of borrowing, and generally are updated every three years. Collateral generally is not held over loans and advances to
banks, except where the counterparty bank assigns securities in the form of treasury bills or government bonds. Collateral
usually is not held against investment securities, and no such collateral was held at 31 December 2019 or 2018.
The main types of collateral obtained includes mortgages over commercial and residential properties, inventory, trade
receivables, and cash collateral.
Management monitors the market values of collaterals and will request additional collaterals in accordance with the
underlying agreement where necessary.
Collateral repossessed
During the year no collateral was repossessed by the bank. Assets valued at GHS104 million was repossessed by the bank
in 2018.
Credit risk concentration

The Group monitors concentrations of credit risk by business industry and by type of customer. An analysis of concentrations
of credit risk by business industry at the reporting date is shown below:
Loans and Advances to Customers

Exposure to Credit Risk
2019 2018
Carrying Amount 2,920,026 2,920,026 2,428,002 2,422,952

Concentration by industry

Agriculture, Forestry & Fishing 182 182 28,279 28,279
Mining and Quarrying 63,316 63,316 27,356 27,356
Manufacturing 167,165 167,165 155,266 155,266
Construction 1,037,888 1,037,888 514,640 514,640
Electricity, gas and water 149,168 149,168 145,837 145,837
Commerce and Finance 534,139 534,139 603,179 598,129
Transport, Storage and Communications 380,106 380,106 313,603 313,603
Services 659,276 659,276 689,864 689,864
Miscellaneous 130,596 130,596 124,226 124,226
3,121,836 3,121,836 2,602,250 2,597,200
Allowance for Impairment (201,810) (201,810) (174,248) (174,248)

2,920,026 2,920,026 2,428,002 2,422,952
Concentration by type of customer

Private Enterprises 2,500,096 2,500,096 2,057,229 2,052,179
Joint Private & State Enterprises 512,244 512,244 444,139 444,139
Individuals 109,496 109,496 100,882 100,882
3,121,836 3,121,836 2,602,250 2,597,200
Allowance for Impairment (201,810) (201,810) (174,248) (174,248)

2,920,026 2,920,026 2,428,002 2,422,952
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Settlement risk
The Group’s activities may give rise to risk at the time of settlement of transactions and trades. Settlement risk is the risk
of loss due to the failure of a company to honour its obligations to deliver cash, securities or other assets as contractually
agreed.
For certain types of transactions the Group mitigates this risk by conducting settlements through a settlement/clearing
agent to ensure that a trade is settled only when both parties have fulfilled their contractual settlement obligations.
Settlement limits form part of the credit approval / limit monitoring process described earlier.
5.3. Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations from its financial liabilities.
5.3.1. Management of liquidity risk

The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
The Group maintains information regarding the liquidity profile of its financial assets and liabilities and details of other
projected cash flows arising from projected future business. The Treasury department then maintains a portfolio of short-
term liquid assets, largely made up of short-term liquid investment securities, loans and advances to banks and other
inter-bank facilities, to ensure that sufficient liquidity is maintained within the Group as a whole. The liquidity requirements
of the businesses are met through various deposit mobilisation strategies, short-term loans from the inter-bank market to
cover any short-term fluctuations and longer term funding to address any structural liquidity requirements.
5.3.2. Exposure to liquidity risk

The matching and control of the maturities and interest rates of assets and liabilities is fundamental to the management of
the bank and the group. It is unusual for banks to be completely matched since business transacted is often of uncertain
term and of different types. An unmatched position may potentially enhance profitability, but may also increase the risk
of losses.
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The following table provides detail on the residual maturity of all financial instruments and other assets and liabilities:
2019 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 597,779 597,779 - - - - - -
Non-Pledged Trading Assets 125,772 - - 125,772 - - - -
Derivative Assets Held for
Risk Management 4,115 - 4,115 - - - - -
Investment Securities 2,704,295 257,271 43,404 420,513 761,683 710,449 325,114 185,861
Loans and Advances to Customers 2,920,026 589,982 69,347 415,266 278,024 386,877 331,927 848,603
Investments in Subsidiaries 2,038 - - - - - - 2,038
Current Tax Assets 13,495 - 12,473 - - - - -
Property Plant and Equipment 504,166 - - - - - - 506,304
Intangible Assets 27,533 - - - - - -
25,395
Right-of-use Assets 87,236 - - - - - -
87,236
Deferred Tax Assets 5,705 - - - - - - 5,705
Other Assets 47,620 -
34,894 12,726 - - - -
Total Assets 7,039,780 1,445,032 164,233 974,277 1,039,707 1,097,326 657,041 1,661,142
Liabilities
Deposits From Banks and
Other Financial Institutions 172,654 50,249 43,251 50,496 8,985 2,729 2,183 14,761
Deposits From Customers 3,694,513 1,534,045 589,581 891,785 354,592 133,317 141,633 49,560
Borrowings 2,028,126 47,579 603,587 176,387 113,614 248,085 253,215 585,659
Lease Liabilities 77,212 3,861 7,721 9,265 11,582 13,126 15,442 16,215
Other Liabilities 106,408 38,238
42,827 25,343 - - - -
Total Liabilities 6,078,913 1,673,972 1,286,967 1,153,276 488,773 397,257 412,473 666,195
Period liquidity gap 960,867 (228,940) (1,121,712) (178,999) 550,934 700,069 244,568 994,947
Cummulative liquidity gap 960,867 (228,940) (1,350,652) (1,529,651) (978,717) (278,648) (34,080) 960,867
Contingent Liabilities 157,127 - 133,746 8,252 8,252 6,877 - -
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2019 Group
Amount
Assets 1 month months months to 1 year years years 5 years

Non-Pledged Trading Assets 125,772 - - 125,772 - - - -
Derivative Assets Held for
Risk Management 4,115 - 4,115 - - - - -
Current Tax Assets 13,971 - 13,971 - - - - -
Property Plant and Equipment 504,242 - - - - - - 506,380
28,789
Right-of-use Assets 87,236 - - - - - -
87,236
34,894 15,190 - - - -
Total Assets 7,048,498 1,445,086 165,837 984,782 1,040,584 1,094,352 657,338 1,660,519
Liabilities
Other Financial Institutions 164,471 50,249 43,251 42,313 8,985 2,729 2,183 14,761
Borrowings 2,028,126 47,579 603,587 176,387 113,614 248,085 253,215 585,659
Lease Liabilities 77,212 - - - - - - 77,212
Other Liabilities 109,389
38,238
42,827 28,324 - - - -
Total Liabilities 6,073,711 1,670,111 1,279,246 1,138,809 477,191 384,131 397,031 727,192
Period liquidity gap 974,787 (225,025) (1,113,409) (154,027) 563,393 710,221 260,307 933,327
Cummulative liquidity gap 974,787 (225,025) (1,338,434) (1,492,461) (929,068) (218,847) 41,460 974,787
2018 Bank

Assets

Investments in Subsidiaries 2,038 - - - - - - 2,038
Property and Equipment 435,493 - - - - - - 435,493
Intangible Assets 19,901 - - - - - - 19,901
40,873 27,654 - - - -
Total Assets 5,405,856 1,645,704 492,350 361,076 268,806 700,325 483,696 1,453,899
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Bank
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

Other Financial Institutions 78,161 24,202 14,021 22,105 2,826 759 607 13,641
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 - - - - -
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
2018 Group
Assets

Current Tax Assets 512 - 512 - - - - -
Property and Equipment 435,583 - - - - - - 435,583
20,632
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
Other Financial Institutions 71,371 24,202 14,021 15,315 2,826 759 607 13,641
Borrowings 1,319,932 89,526 185,801 323,944 129,686 103,264 325,350 162,361
Current Tax Liabilities 7,301 - 7,301 - - - - -
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
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The Group’s financial liabilities are valued on the basis of their earliest possible contractual maturity. The Group’s expected
cash flows on these instruments vary significantly from this analysis. For example, demand deposits from customers are
expected to maintain a stable or increasing balance.

The table above analyses assets and liabilities of the group into relevant maturity groupings based on the remaining period
at the reporting date to the contractual maturity date. The matching and control of the maturities and interest rates of
assets and liabilities is fundamental to the management of the bank.
5.3.3. Available Counterparty Liquidity

The Group has available lines of credit from its counterparties to finance its business. The table below summarizes the
Group’s available lines of credit at year-end and the amounts stated in the table are the cedi equivalent of the foreign
currencies.
Description 2019 2018

Lines for letters of credit establishment 1,487,889 1,487,889 1,382,751 1,382,751

Lines for letters of credit refinancing/ payment 1,245,083 1,245,083 650,700 650,700
5.4. Market risks

Market risk is the risk that changes in market prices, such as interest rate, equity prices, foreign exchange rates and credit
spreads (not relating to changes in the obligor’s / issuer’s credit standing) will affect the Group’s income or the value
of its holdings of financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the return on risk.
5.4.1. Management of market risks

The Group separates its exposure to market risk between trading and non-trading portfolios. Trading portfolios mainly
are held by the brokerage subsidiary, and include positions arising from market making and proprietary position taking,
together with financial assets and liabilities that are managed on a fair value basis.
Overall authority for market risk is vested in ALCO. The 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 cash flows
or fair values of financial instrument because of a change in market interest rates. Interest rate risk is managed principally
through monitoring interest rate gaps and by having pre-approved limits for re-pricing bands. The ALCO is the monitoring
body for compliance with these limits and is assisted by Risk Management department in its day-to-day monitoring
activities.
The management of interest rate risk against interest rate gap limits is supplemented by monitoring the sensitivity of the
Group’s financial assets and liabilities to various standard and non-standard interest rate scenarios. Standard scenarios that
are considered on a monthly basis include a 100 basis point (bp) parallel fall or rise in all yield curves and a 50 bp parallel
fall or rise in all yield curves. An analysis of the Group and company’s sensitivity to an increase or decrease in market
interest rates (assuming no asymmetrical movement in yield curves and a constant balance sheet position) is as follows:
78 2019
CalBank
100 bp 100 bp 50 bp 50 bp
parallel parallel parallel parallel
increase decrease increase decrease
Sensitivity of projected net interest income

At 31 December 2019 (8,879) 8,879 (4,440) 4,440

At 31 December 2018 (1,869) 1,869 (935) 935
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.
Group and Bank

US British
2019 Euro Others Total
Dollars Pounds
Assets
Cash and Cash Equivalents 115,124 16,377 32,429 2,383 166,313
Loans and Advances to Customers 1,309,199 - 84 - 1,309,283
Other Assets 307 29 - - 336
Total Assets 1,424,630 16,406 32,513 2,383 1,475,932

Liabilities
Deposits From Customers 542,861 18,397 35,404 - 596,662
Borrowings 1,972,722 - - - 1,972,722
Other Liabilities 17,038 54 112 - 17,204
Total Liabilities 2,532,621 18,451 35,516 - 2,586,588

Net On-Balance Sheet Position (1,107,991) (2,045) (3,003) 2,383 (1,110,656)

Off-Balance Sheet Credit Commitments 238,014 - 10,196 - 248,210

Total Exposure (869,977) (2,045) 7,193 2,383 (862,446)
2019 79
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Group and Bank

US British
Euro Others Total
2018 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)
5.4.4. Currency risk

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The
Board has set limits on positions by currency. In accordance with the Bank’s policy, positions are monitored on a daily basis.
The table below indicates the currencies to which the Group had significant exposure at 31 December 2019 and 2018
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 and equity (due
to the fair value of currency sensitive non–trading monetary assets and liabilities).
Negative amount in the table reflects a potential net reduction in statement of profit or loss or equity, while a positive
amount reflects a net potential increase. An equivalent decrease in each of the currencies below against the cedis would
have resulted in an equivalent but opposite impact.
2019 2018
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 5.5337 15% (164,061) 4.8200 9% (50,751)

British Pounds 7.3164 19% (380) 6.1711 3% 99
Euro 6.2114 13% (380) 5.5131 4% (251)
80 2019
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5.5. Operational risks

Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group’s
processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks
such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour.
Operational risks arise from all of the Group’s operations and are faced by all business entities.
The Group’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to
the Group’s reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.
The primary responsibility for the development and implementation of controls to address operational risk is assigned
to senior management within each business unit. This responsibility is supported by the development of overall Group
standards for the management of operational risk in the following areas:
• requirements for appropriate segregation of duties, including the independent authorisation of transactions
• requirements for the reconciliation and monitoring of transactions
• compliance with regulatory and other legal requirements
• documentation of controls and procedures
• requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to
address the risks identified
• requirements for the reporting of operational losses and proposed remedial action
• development of contingency plans
• training and professional development
• ethical and business standards
• risk mitigation, including insurance where this is effective.
Compliance with Group standards is supported by a programme of periodic reviews undertaken by Internal Audit, Internal
Control, Risk and Compliance Departments. The results of these reviews are discussed with the management of the
business unit to which they relate, with summaries submitted to the Senior Management Committee, Audit Committee,
Risk Management Committee and the Board.
5.6. Capital management Regulatory capital

The Group’s lead regulator, the Bank of Ghana, monitors capital requirements for the Group. In implementing current
capital requirements the Bank of Ghana requires the Group to maintain a prescribed ratio of total capital to total risk-
weighted assets.
The Group’s regulatory capital is analysed into two tiers:
Tier 1 capital, which includes ordinary share capital, retained earnings and minority interests after deductions for goodwill
and intangible assets, and other regulatory adjustments relating to items that are included in equity but are treated
differently for capital adequacy purposes.
Tier 2 capital, which includes qualifying subordinated liabilities and the element of the fair value reserve relating to
unrealised gains on equity instruments classified as available-for-sale.
The carrying amounts of investments in subsidiaries that are not included in the regulatory consolidation and investments
in the capital of banks and certain other regulatory items are deducted from capital.
2019 81
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The Group’s operations are categorised as either trading book or banking book, and risk-weighted assets are determined
according to specified requirements that seek to reflect the varying levels of risk attached to assets and off-balance sheet
exposures.
The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. The impact of the level of capital on shareholders’ return is also recognised
and the Group recognises the need to maintain a balance between the higher returns that might be possible with greater
gearing and the advantages and security afforded by a sound capital position.
The Group and its individually regulated operations have complied with all externally imposed capital requirements
throughout the period.
There have been no material changes in the Group’s management of capital during the period.
82 2019
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The regulatory capital position at 31 December was as follows:

2019 2018
Notes Bank Group Bank Group
Paid Up Capital 400,000 400,000 400,000 400,000

Retained Earnings 174,819 189,473 58,140 73,666
Statutory Reserves 288,353 288,353 244,782 244,782
Other Quarlifying Reserves (6,941) (7,675) (17,918) (18,571)
Total CET1 Reserves 456,231 470,151 285,004 299,877

Tier 1 Capital Before Deductions 856,231 870,151 685,004 699,877

Software 27,533 28,789 19,901 20,632
Deferred Tax 5,705 5,788 14,891 15,075
Others 44,126 46,177 64,625 67,174

CET1 Capital After Deductions 778,867 789,397 585,587 596,996

Tier 1 Capital 778,867 789,397 585,587 596,996

Subordinated Term Debt 147,023 147,023 141,082 141,082
Property Revaluation Reserve (@50%) 52,318 52,318 31,763 31,763

Tier 2 Capital (Limited to 2% of Risk Weighted Assets) 75,848 76,214 80,733 81,285

Total Regulatory Capital 854,715 865,611 666,320 678,281

Risk Weighted Assets - Credit Risk 2,981,914 2,979,204 3,249,023 3,247,942
Risk Weighted Assets - Operational Risk 793,964 806,170 737,082 756,181
Risk Weighted Assets - Market Risk 16,500 25,313 50,528 60,118

Total Risk Weighted Assets 3,792,378 3,810,687 4,036,633 4,064,241


Summary of Key Ratios

Tier 1 Capital Ratio 20.5% 20.7% 14.5% 14.7%
Tier 2 Capital Ratio 2.0% 2.0% 2.0% 2.0%
Leverage Ratio* 10.8% 11.0% 10.3% 10.5%
*In computing leverage ratio, total assets

(Off and On-Balance Sheet) amounted to 7,196,907 7,205,668 5,683,177 5,696,620
2019 83
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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 allocated 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

2019 2018

Non-Performing Loans Ratio 9.9% 9.9% 8.0% 8.0%
Liquid Ratio 142% 143% 104% 104%
Compliance with statutory liquidity requirement
(i) Default in Statutory Liquidity Nil Nil Nil Nil

(ii) Default in Statutory Liquidity Sanction (GHS’000) Nil Nil Nil Nil
(iii) Other Regulatory Penalties (GHS’000) 24 24 Nil Nil
84 2019
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6. USE OF ESTIMATES AND JUDGEMENTS

Management discussed with the Audit Committee the development, selection and disclosure of the Group’s critical
accounting policies and estimates, and the application of these policies and estimates.
These disclosures supplement the commentary on financial risk management (see note 5).
Key sources of estimation uncertainty

Allowances for credit losses
Assets accounted for at amortised cost are evaluated for impairment on a basis described in accounting policy note 4.
The specific counter party component of the total allowances for impairment applies to claims evaluated individually for
impairment and is based upon management’s best estimate of the present value of the cash flows that are expected to be
received. In estimating these cash flows, management makes judgements about a counter party’s financial situation and
the net realisable value of any underlying collateral. Each impaired asset is assessed on its merits, and the workout strategy
and estimate of cash flows considered recoverable are independently approved by the Credit Risk function.
Collectively assessed impairment allowances cover credit 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.
Determining fair values

The determination of fair value for financial assets and liabilities for which there is no observable market price requires the
use of valuation techniques as described in note 8. For financial instruments that trade infrequently and have little price
transparency, fair value is less objective, and requires varying degrees of judgement depending on liquidity, concentration,
uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.
Critical accounting judgements made in applying the Group’s accounting policies include:
Financial asset and liability classification

The Group’s accounting policies provide scope for assets and liabilities to be designated on inception into different
accounting categories in certain circumstances:
In classifying financial assets or liabilities as amortised cost, the Group has determined that it meets the description of
trading assets and liabilities set out in accounting policy note 4.9.4.
In designating financial assets or liabilities at fair value through profit or loss, the Group has determined that it has met
one of the criteria for this designation set out in accounting policy note 4.9.4.
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7. OPERATING SEGMENTS
The group has five reportable segments. Information regarding each reportable segment is presented below. For
management purposes the group is organised into five reportable segments based on products and services as follows;
• Corporate Banking: is responsible for providing loans and other credit facilities, as well as deposits and other
transactions and balances to corporate clients, institutional clients and public sector entities. It also provides corporate
finance services, mergers and acquisitions advice, specialised financial advice and custody services.
• Retail & Business Banking: provide loans and overdrafts as well as handles the deposits and other transactions of
small and medium enterprises (SMES), individuals customers such as funds transfer, standing orders and ATM’s Card
services.
• Treasury: undertakes the Bank’s funding and centralised risk management activities through borrowings, and investing
in liquid assets such as short-term placements and government debt securities. It also trade in foreign currencies.
• Brokerage: subscribe for, underwrite, buy, hold, manage, and sell securities either on or off a stock exchange either
as principals or agents. It also provides issuing house underwriting services and sponsorship to corporate clients.
• 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 performance is evaluated based on operating profit or loss
which in certain respects is measured differently from operating profit or loss in the financial statements.
Transactions between operating segments are on an arm’s length basis in a manner similar to transactions with third
parties.
Interest income is reported net, as management primarily relies on net interest revenue as a performance measure, not
the gross income and expense.
For the purpose of segmental reporting, surplus funds or deficit per business unit is either sold to or purchased from the
Bank pool based on a pool rate determined by Treasury using the Bank’s cost of funds plus a margin for both local and
foreign currencies.
The assets that are not allocated to any reportable segment are made up of other assets, current tax assets, deferred tax
assets, property and equipment, intangible assets and cash balances held at head office. The liabilities are also made up of
current tax liabilities, deferred tax liabilities, accruals and other liabilities that are not allocated to any business.
No single customer revenue is 10% or more of the total external revenue
The tables below shows an analysis of the performance of the business units of the Group.
86 2019
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 2019
External Revenues

Net Interest Income 187,684 163,464 165,473 265 1,220 - 518,106
Net Fees and Commissions 19,205 19,488 806 - 7,098 - 46,597
Net Trading Income - - 27,168 - - - 27,168
Other Operating Income 11 648 4,302 (426) (14) - 4,521
Intersegment Revenue (393) - - (58) 451 - -
Total Segment Revenues 206,507 183,600 197,749 (219) 8,755 - 596,392
Operating Costs (25,321) (128,678) (8,021) (4,702) (2,800) (183,930) (353,452)
Segment Results 181,186 54,922 189,728 (4,921) 5,955 (183,930) 242,940
Income Tax Expense - - - (16) (1,886) (67,625) (69,527)
Profit/(Loss) For The Period 181,186 54,922 189,728 (4,937) 4,069 (251,555) 173,413

Segment Assets 2,245,545 678,273 3,419,799 4,006 16,171 684,704 7,048,498
Total Assets 2,245,545 678,273 3,419,799 4,006 16,171 684,704 7,048,498
2019
CalBank

Segment Liabilities 1,582,013 1,407,421 2,900,321 2,367 671 180,918 6,073,711
Total Liabilities 1,582,013 1,407,421 2,900,321 2,367 671 180,918 6,073,711

Impairment Loss on Financial Assets (14,672) (68,695) - (2,699) - - (86,066)
Depreciation and Amortisation (189) (5,210) (141) (15) (126) (15,267) (20,948)
Expenditure on non-current assets - 4,140 - 312 78 20,919 25,449
87
88
7. Operating segments (Continued)
Corporate
Consumer & Retail Asset
Banking & Treasury Brokerage Unallocated Consolidated
CalBank
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
2019
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

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
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 2019 and 2018.
Greater
2019 Northern Ashanti Western Consolidated
Accra
Interest Income 8,271 32,688 38,354 833,096 912,409
Interest Expense (3,656) (6,428) (10,809) (373,410) (394,303)
Net Interest Income 4,615 26,260 27,545 459,686 518,106

Net Fees and Commissions 523 5,132 4,888 36,054 46,597
Net Trading Income - - - 27,168 27,168
Recognised gains on derivative assets - - - 4,115 4,115
Other Operating Income 1 8 1 396 406
Operating Income 5,139 31,400 32,434 527,419 596,392

Net Impairement Loss on Financial Assets (129) (26,282) (11,178) (48,477) (86,066)
Personel Expenses (986) (7,034) (5,139) (121,420) (134,579)
Depreciation and Amortisation (244) (1,053) (957) (18,694) (20,948)
Lease Expenses (591) (1,229) (888) (8,925) (11,633)
Other Expenses (610) (3,931) (2,748) (92,937) (100,226)
Total Operating Expenses (2,560) (39,529) (20,910) (290,453) (353,452)

Profit Before Income Tax 2,579 (8,129) 11,524 236,966 242,940
Income Tax Expense - - - - (69,527)
Profit For The Period 2,579 (8,129) 11,524 236,966 173,413

Segment Assets 1,778 155,950 147,467 6,743,303 7,048,498
Total Assets 1,778 155,950 147,467 6,743,303 7,048,498

Segment Liabilities 58,242 315,164 169,200 5,531,105 6,073,711
Total Liabilities 58,242 315,164 169,200 5,531,105 6,073,711
2019 89
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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
90 2019
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8. 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
Fair value
2019 OCI Profit or cost amount
Loss
The Bank
Cash and Cash Equivalents - - 597,779 597,779 597,779
Non-Pledged Trading Assets - 125,772 - 125,772 125,772
Derivative Assets Held for Risk Management - 4,115 - 4,115 4,115
Investment Securities - 151 2,704,144 2,704,295 2,704,295
Loans and Advances to Customers - - 2,920,026 2,920,026 2,920,026
Investments in Subsidiaries 2,038 - - 2,038 2,038
2,038 130,038 6,221,949 6,354,025 6,354,025
Deposits From Banks and Other Financial Institutions - - 172,654 172,654 172,654
Deposits From Customers - - 3,694,513 3,694,513 3,694,513
Borrowings - - 2,028,126 2,028,126 2,028,126
Lease Liabilities - - 77,212 77,212 77,212
Other Liabilities - - 106,408 106,408 106,408
- - 6,078,913 6,078,913 6,078,913
Fair Value
Fair value
Loss
The Group
Non-Pledged Trading Assets - 125,772 125,772 125,772
Derivative Assets Held for Risk Management - 4,115 4,115 4,115
Investment Securities - 733 2,709,958 2,710,691 2,710,691
Loans and Advances to Customers - 2,920,026 2,920,026 2,920,026
- 130,620 6,227,768 6,358,388 6,358,388
Borrowings - - 2,028,126 2,028,126 2,028,126
Lease Liabilities - - 77,212 77,212 77,212
- - 6,073,711 6,073,711 6,073,711
2019 91
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8. Financial assets and liabilities (Continued)
Fair Value
Fair value
Loss
The Bank
Investment Securities 276,118 1,523,321 - 1,799,439 1,799,439
Investments in Subsidiaries 2,038 - - 2,038 2,038
278,156 1,523,321 3,065,567 4,867,044 4,867,044
Borrowings - - 1,319,932 1,319,932 1,319,932
- - 4,634,011 4,634,011 4,634,011
Fair Value
Fair value
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
92 2019
CalBank

(a) Fair value approximates carrying value due to the minimal credit losses and short-term nature of the financial assets
and liabilities.
(b) Financial instruments at fair value are either priced with reference to a quoted market price for that instrument or by
using a valuation model. Where the fair value is calculated using a valuation model, the methodology is to calculate the
expected cash flows under the terms of each specific contract and then discount these values back to a present value.
The expected cash flows for each contract are determined either directly by reference to actual cash flows implicit in
observable market prices or through modelling cash flows using appropriate financial-markets pricing models. Wherever
possible these models use as their basis observable market prices and rates including, for example, interest rate yield
curves, equities and commodities prices, option volatilities and currency rates.
(c) The fair value for loans and advances, and other lending is estimated using discounted cash flows, applying either
market rates where practicable or, where the counterparty is a bank, rates currently offered by other financial institutions
for placings with similar characteristics. In certain cases the fair value approximates carrying value because the instruments
are short term in nature or reprice frequently.
(d) Fair values of deposit liabilities payable on demand (interest free, interest bearing and savings deposits) approximate to
their carrying value. The fair value of all other deposits and other borrowings (including repurchase agreements and cash
collateral on securities lent) is estimated using discounted cash flows, applying either market rates, where practicable, or
rates currently offered by the Group for deposits of similar remaining maturities.
(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.
(f) Fair value hierarchy
Fair value measurement
The Bank measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in
making the measurements:
• Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
• Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived from
prices). This category includes instruments valued using quoted market prices in active markets for similar instruments;
quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation
techniques where all significant inputs are directly or indirectly observable from market data.
• Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the
valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect
on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar
instruments where significant unobservable adjustments or assumptions are required to reflect differences between the
instruments.
The determination of fair values of quoted financial assets and financial liabilities in active markets are based on quoted
market prices or dealer price quotations. If the market for a financial asset or financial liability is not actively traded, the
Bank establishes fair value by using valuation techniques. These techniques include the use of arms’ length transactions,
discounted cash flow analysis, and valuation models and techniques commonly used by market participants.
2019 93
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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, and quoted prices on the Ghana stock exchange
The Level 2 was valued using Government of Ghana quoted market prices for similar instruments, and quoted prices on
the Ghana stock exchange
Level 3 - valuation techniques are based on significant observable inputs
2019 2018
The Bank Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Derivative Assets Held for Risk

Management - - 4,115 4,115 - - - -
Investment Securities 987,416 1,716,879 - 2,704,295 275,983 1,523,456 - 1,799,439
987,416 1,716,879 4,115 2,708,410 275,983 1,523,456 - 1,799,439

The Group
Derivative Assets Held for Risk
Management - - 4,115 4,115 - - - -
Investment Securities 987,416 1,723,275 - 2,710,691 275,983 1,539,929 - 1,815,912
987,416 1,723,275 4,115 2,714,806 275,983 1,539,929 - 1,815,912
9. NET INTEREST INCOME

2019 2018
INTEREST INCOME
Cash and Cash Equivalents 46,926 46,926 19,280 19,280
Loans and Advances to Customers 483,239 483,028 477,203 477,203
Investment securities at amortised cost 381,118 382,455 233,536 234,055
Investment securities at FVOCI - - 42,732 42,732
Total interest income calculated using the effective
interest rate method 911,283 912,409 772,751 773,270

INTEREST EXPENSE
Deposits from Banks 7,379 7,379 11,927 12,100
Deposits from Customers 281,935 281,287 257,946 252,652
Debt Securities Issued 105,641 105,637 86,889 86,889
Total Interest Expense 394,955 394,303 356,762 351,641
Included within various line items under interest income for the year ended 31 December 2019 is a total of GHS19.01 million (2018:
GHS15.84 million) accrued on impaired financial assets.
The net interest reported include interest income and expense, calculated using the effective interest method, that relate to the
following financial assets and financial liabilities.
94 2019
CalBank

9. Net Interest Income (Continued)

2019 2018
Financial assets measured at amortised cost 6,351,987 6,358,388 4,576,524 4,587,952
Financial assets measured at FVOCI - - 278,225 278,225
Total 6,351,987 6,358,388 4,854,749 4,866,177

Financial liabilities measured at amortised cost 5,895,293 5,887,110 4,476,775 4,469,985
10. NET FEE AND COMMISSION INCOME

2019 2018
Bank Group Bank

Fee and Commission Income
Customer Fees 9,605 9,605 8,889 8,889
Credit Related Fees 24,447 24,447 42,378 42,378
Corp Finance & Advisory Fees 10,221 17,281 5,726 13,332
Other 13,292 13,292 11,389 11,389
Total Fee and Commission Income 57,565 64,625 68,382 75,988

Fee and Commission Expense
Inter-bank transaction fees 15,409 15,409 6,194 6,194
Other fees and commission expense 2,619 2,619 251 251
Total Fee and Commission Expense 18,028 18,028 6,445 6,445
Net Fee and Commission Income 39,537 46,597 61,937 69,543
11. NET TRADING INCOME

2019 2018
Fixed Income 26,919 26,919 32 32

Foreign Exchange 249 249 26,886 26,902
Equities held-for-trading - - - 172
Net Trading Income 27,168 27,168 26,918 27,106
12. OTHER OPERATING INCOME

2019 2018
Rental Income - - 108 108

Other Income 376 22 318 636
Dividend Income - 86 15,026 32
Profit From disposal of Property Plant and Equipment 298 298 203 203
674 406 15,655 979
2019 95
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13. PERSONNEL EXPENSES

2019 2018
Salaries 63,621 65,586 59,446 60,972

Defined Benefit Contribution Plans 7,440 7,670 6,860 7,081
Other Personnel Expenses 60,013 61,323 56,002 57,311
131,074 134,579 122,308 125,364
Included within personal expenses for the year is a total of GHS17.3 million (2018: GHS4.8 million) relating to executive directors.
The average number of persons employed by the bank during the year was 816 (2018: 792)
14. OTHER EXPENSES

2019 2018
Software Licensing and Other Information Technology Cost 21,797 22,111 17,160 17,490
Auditors’ Remuneration 340 397 269 316
Directors Fees & Allowances 5,142 5,298 1,556 1,675
Other Expenses 71,712 72,420 70,444 73,057
98,991 100,226 89,429 92,538
Other expenses includes communications, insurance, computer cost, printing & stationery, fuel & lubricants, and outsource costs

96 2019
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15. INCOME TAX EXPENSE
Recognised in the statement of comprehensive income

2019 2018
Income tax expense
Current tax expense 24 70,826 72,586 65,878 68,347
Deferred tax expense 25 (3,160) (3,059) 1,535 1,343
Total income tax expense 67,666 69,527 67,413 69,690
Reconciliation of effective tax rate
Profit before tax 241,951 242,940 230,353 222,906
Corporate Tax Rate 25% 25% 25% 25%

National Fiscal Stabilisation Levy Rate 5% 5% 5% 5%
Income tax using the domestic tax rate 60,488 60,735 57,588 55,727
Non-deductible expenses 4,435 5,959 36,387 40,857
Tax at different rate - - 30 30
Capital allowances (9,355) (9,314) (38,110) (38,069)
National fiscal and stabilisation levy 12,098 12,147 11,518 11,145
Current income tax charge 67,666 69,527 67,413 69,690

Effective tax rate 28.0% 28.6% 29.3% 31.3%
16. EARNINGS PER SHARE
Basic earnings per share

The calculation of basic earnings per share as at 31 December 2019 was based on the profit attributable to ordinary shareholders and a
weighted average number of ordinary shares outstanding of 626 million (2018: 626 million), calculated as follows:
2019 2018

Net profit for the year attributable to equity holders of the Bank 174,285 173,413 162,940 153,216

Weighted average number of ordinary shares

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

Basic earnings per share (GHS) 0.2782 0.2772 0.2600 0.2449
2019 97
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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 2019 was based on the profit attributable to ordinary shareholders
and a weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares
of 625.6 million (2018: 625.6 million), calculated as follows:
2019 2018
Profit for the year attributable to ordinary shareholders 174,285 173,413 162,940 153,216

Weighted average number of ordinary shares (diluted)

Weighted average number of ordinary shares (basic) 626,585 626,585 548,262 548,262
Effect of treasury shares held by subsidiaries - (997) - (997)
Bonus shares issued during the year - - 78,323 78,323
Weighted average number of ordinary shares (diluted) 626,585 625,588 626,585 625,588
Diluted earnings per share (GHS) 0.2782 0.2772 0.2600 0.2449
17. DIVIDEND PER SHARE

The directors recommend the payment of a dividend of GHS0.089 per share (2018: GHS0.048).
18. CASH AND CASH EQUIVALENTS

2019 2018
Cash and Balance with Banks 149,327 149,332 132,672 132,677
Unrestricted Balances with Bank of Ghana 52,934 53,752 169,704 170,383
Restricted Balances with Bank of Ghana 386,376 385,558 315,684 315,005
Items in course of collection 9,142 9,142 19,505 19,505
597,779 597,784 637,565 637,570
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 earning.
19. INVESTMENT SECURITIES

2019 2018
Securities at amortised cost 2,704,144 2,709,958 1,523,321 1,535,504
Securities at FVOCI - - 275,983 275,983
Securities at FVTPL 151 733 135 4,425
2,704,295 2,710,691 1,799,439 1,815,912
A. Securities at Amortised Cost
Money Market Placements 257,107 262,921 685,300 692,461
Treasury Bills 590,179 590,179 385,217 385,217
Government Notes 869,442 869,442 452,804 457,826
Government Bonds 987,416 987,416 - -
2,704,144 2,709,958
1,523,321 1,535,504
98 2019
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19. Investment Securities Continued)
2019 2018
B. Securities at FVOCI
Government Bonds - - 275,983 275,983
- - 275,983 275,983
C. Securities at FVTPL
Equities 151 733 135 4,425
151 733 135 4,425
A total of GHS 21.8 million (2018: GHS 60.3 million) of Investment Securities have been used as security for interbank and short
term borrowing.
20. Non-Pledged Trading Assets

2019 2018
Fixed Income Trading portfolio 125,772 125,772 - -
125,772 125,772 - -
21. LOANS AND ADVANCES TO CUSTOMERS

(a) Analysis by portfolio 2019 2018
Retail:
Mortgage 41,472 41,472 41,393 41,393
Personal Loans 54,774 54,774 47,801 47,801
SME 289,558 289,558 356,233 356,233
Retail Gross Loans and Advances 385,804 385,804 445,427 445,427
Corporate:
Financial Institutions 302,238 302,238 257,796 252,746
Other Secured 2,433,794 2,433,794 1,899,027 1,899,027
Corporate Gross Loans and Advances 2,736,032 2,736,032 2,156,823 2,151,773
Gross Loans and Advances 3,121,836 3,121,836 2,602,250 2,597,200
Less:
Identified Impairment - Corporate (150,724) (150,724) (153,291) (153,291)
Identified Impairment - Retail (26,194) (26,194) - -
Unidentified Impairment - Corporate (17,646) (17,646) (12,572) (12,572)
Unidentified Impairment - Retail (7,246) (7,246) (8,385) (8,385)
Carrying Amount 2,920,026 2,920,026 2,428,002 2,422,952
(b) Analysis by type
Overdrafts 709,542 709,542 497,417 492,367

Term Loans 2,412,294 2,412,294 2,104,833 2,104,833
Gross Loans and Advances 3,121,836 3,121,836 2,602,250 2,597,200
Less:
Identified Impairment (176,918) (176,918) (153,291) (153,291)
Unidentified Impairment (24,892) (24,892) (20,957) (20,957)
Carrying Amount 2,920,026 2,920,026 2,428,002 2,422,952
2019 99
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i. The above constitute loans and advances (including credit bills negotiated) to customers and staff.
ii. Loan loss provision ratio is 6.4% of gross advances ( 2018: 6.7%).
iii. Gross Non-performing loans ratio per Bank of G
hana requirement is 9.9% (2018: 8.4%).
iv. Fifty (50) largest exposures (gross funded and non-funded) to total exposures is 70.0% ( 2018: 78.6%).
v. The maximum amount due from officers of the b
ank during the year amounted to GHS31.47 million
(2018: GHS26.63 million).
Loans and advances are carried at amortised cost. There were no loans carried at fair value through profit or loss

2019 2018
Allowances for Identified Impairment Bank Group Bank Group
Balance at 1 January 153,291 153,291 149,712 149,712
Impairment Charge for the year 133,269 133,269 71,130 71,130
Write-offs (109,642) (109,642) (67,551) (67,551)
Balance at 31 December 176,918 176,918 153,291 153,291
Allowances for Unidentified Impairment

Balance at 1 January 20,957 20,957 4,386 4,386
IFRS 9 Impact - - 17,086 17,086
Impairment Charge for the year 4,226 4,226 311 311
Write-offs (291) (291) (826) (826)
Balance at 31 December 24,892 24,892 20,957 20,957

Credit Loss Expense
Net increase in impairment on loans 137,495 137,495 71,441 71,441
Impairment charge on off-balance sheet exposures (1,018) (1,018) 1,361 1,361
Impairment charge on equities held for trading - 2,699 - -
Amounts recovered previously written off (53,110) (53,110) (6,067) (6,067)
Net charge to the income statement 83,367 86,066 66,735 66,735
22. INVESTMENTS IN SUBSIDIARIES
(a) The Principal Subsidiaries are:

Country of
Amounts Percentage
Name Nature of Business Incorporation
2019 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
2018
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
100 2019
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22. Investments in Subsidiaries (Continued)
2019 2018
Investments in subsidiaries are stated at cost and comprise:
Investments in Subsidiaries 2,038 - 2,038 -
(b) Summary of Subsidiary Accounts
2019
CBL CAML CBNL CTCL
Revenue (219) 8,755 - -
Expenses (4,702) (2,800) - -
Income Tax and National Fiscal Stabilization Levy (16) (1,886) - -
Profit /(Loss) for the year (4,937) 4,069 - -

Total Assets 4,006 16,171 10 10
Total Liabilities 2,367 671 - -
Total Shareholder’s Equity 1,639 15,500 10 10
Total Cash Inflows 32,056 353,976 - -
Total Cash Outflows (28,899) (351,414) - -
Net Cash Inflow 3,157 2,562 - -
2018
CBL CAML CBNL CTCL
Revenue 3,969 10,328 - -
Expenses (3,779) (2,801) - -
Income Tax and National Fiscal Stabilization Levy (50) (2,260) - -
Profit for the year 140 5,268 - -
Total Assets 15,421 13,027 10 10

Total Liabilities 8,861 1,603 - -
Total Shareholder’s Equity 6,560 11,423 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
23. OTHER ASSETS

2019 2018
Prepayments 44,126 46,177 64,625 67,174
Sundry Debtors 3,494 3,907 3,902 3,889
47,620 50,084 68,527 71,063
2019 101
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The Bank
24. CURRENT TAX ASSETS/LIABILITIES
Balance Charge for Balance

Payments
1/1/2019 the year 31/12/2019
Income Tax
2018 6,242 (7,298) 1,056 -
2019 - (71,788) 57,672 (14,116)
6,242 (79,086) 58,728 (14,116)

National Fiscal Stabilisation Levy
2018 1,031 (1,031) - -
2019 0 (11,477) 12,098 621
1,031 (12,508) 12,098 621

Total 7,273 (91,594) 70,826 (13,495)
The Group
Balance Charge for Balance

Payments
1/1/2019 the year 31/12/2019
Income Tax
2009 - 2018 5,149 (7,298) 1,056 (1,093)
2019 - (73,541) 59,432 (14,109)
5,149 (80,839) 60,488 (15,202)
National Fiscal Stabilisation Levy

2009 - 2017 610 (1,031) - (421)
2018 1,031 1,031
2019 - (11,477) 12,098 621
1,641 (12,508) 12,098 1,231
Total 6,790 (93,347) 72,586 (13,971)
Liabilities up to and including 2018 for the Bank have 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.
25. DEFERRED TAXATION

2019 2018
Balance at the beginning (14,891) (15,075) (17,706) (17,698)
Origination/reversal of temporary differences:
recognised in statement of profit or loss (3,160) (3,059) 1,535 1,343
recognised in OCI 12,346 12,346 1,280 1,280
Balance at the end (5,705) (5,788) (14,891) (15,075)
102 2019
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25. Deferred Taxation (Continued)
Recognised deferred tax assets and liabilites:

Deferred tax liabilities are attributable to the following:
2019 Bank Group

Assets Liabilities Net Assets Liabilities Net
Property, plant and equipment - 46,860 46,860 - 46,964 46,964
Impairment Allowance (50,538) - (50,538) (50,725) - (50,725)
Others - (2,027) (2,027) - (2,027) (2,027)
Net tax (assets)/liabilities (50,538) 44,833 (5,705) (50,725) 44,937 (5,788)
Recognised deferred tax assets and liabilites:

Deferred tax liabilities are attributable to the following:
2018 Bank Group

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)
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.
26. PROPERTY AND EQUIPMENT
The Bank
2019 Furniture,
Bank Motor Work in
Fixtures & Total
Premises Vehicles Progress
Equipment
Cost
Balance at 1 January 248,467 90,640 7,508 128,708 475,323
Additions 331 7,617 2,280 21,934 32,162
Disposals - - (414) - (414)
Surplus on Revaluation 50,184 - - - 50,184
Transfers - 1,093 - (1,093) -
Balance at 31 December 298,982 99,350 9,374 149,549 557,255
Accumulated Depreciation
Balance at 1 January 6,507 29,206 4,117 - 39,830
Charge for the year 4,169 12,907 1,220 - 18,296
Release on Revaluation (4,629) - - - (4,629)
Released on Disposal - - (408) - (408)
Balance at 31 December 6,047 42,113 4,929 - 53,089
Net Book Value
At 31 December 292,935 57,237 4,445 149,549 504,166
2019 103
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26. Property and Equipment (Continued)
The Group
2019 Furniture,
Bank Motor Work in
Fixtures & Total
Cost Equipment
Additions 331 7,643 2,280 21,934 32,188
Disposals - - (414) - (414)
Surplus on Revaluation 50,184 - - - 50,184
Transfers - 1,093 - (1,093) -

Release on Revaluation (4,629) - - - (4,629)
Released on Disposal - - (408) - (408)

Net Book Value
At 31 December 292,935 57,314 4,444 149,549 504,242
The Bank

2018 Furniture,
Bank Motor Work in
Fixtures & Total
Equipment
Cost
Additions 24,060 3,396 620 139,538 167,614
Disposals - - (1,292) - (1,292)
Transfers 107,714 35,027 - (144,015) (1,274)

Released on Disposal - - (1,273) - (1,273)


Net Book Value
At 31 December 241,960 61,434 3,391 128,708 435,493
104 2019
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The Group
2018 Furniture,
Bank Motor Work in
Fixtures & Total
Equipment
Cost
Additions 24,060 3,441 620 139,538 167,659
Disposals - - (1,292) - (1,292)
Transfers 107,714 35,027 - (144,015) (1,274)

Released on Disposal - - (1,273) - (1,273)

Net Book Value
At 31 December 241,960 61,525 3,390 128,708 435,583
The Group’s leasehold Land and Buildings are stated at their revalued amounts, being the fair value at the
date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment
losses. The fair value measurements of the Group’s leasehold land and buildings as at 31 December 2019 was
performed by Messrs Apex Valuation, Surveying & Property Consult and Assenta Property Consulting. Messrs
Apex Valuation, Surveying & Property Consult and Assenta Property Consulting are Chartered Surveyors,
members of the Ghana Institute of Surveyors and they have the appropriate qualifications and experience in
the fair value measurement of properties in the relevant locations.
The fair value of the leasehold land and buildings was determined based on the market comparable approach
that reflects recent transaction prices for similar properties. The fair value of the buildings was determined
using the cost approach that reflects the cost to a market participant to construct assets of comparable utility
and age, adjusted for obsolescence. There has been no change to the valuation technique during the year.
None of the assets of the bank has been used as security for any loan.
The Bank The Group

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
2019
Bank Premises - - 292,935 292,935 - - 292,935 292,935
- - 292,935 292,935 - - 292,935 292,935
2018
Bank Premises - - 241,960 241,960 - - 241,960
241,960
- - 241,960
241,960 - -
241,960
241,960
There was no transfer between different levels of hierarchy during the year.
2019 105
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Profit on disposal of property and equipment has been arrived at as follows:-

Profit on disposal of property and equipment has been arrived at as follows:
2019 2018
Cost 414 414 1,292 1,292
Accumulated Depreciation (408) (408) (1,273) (1,273)
Net Book Value 6 6 19 19

Disposal Proceeds 304 304 222 222
Profit on Disposals 298 298 203 203
27. INTANGIBLE ASSETS

The Bank The Group
2019 Software Work In Software Work In
Cost Total Total
Cost Progress Cost Progress

Balance at 1 January 25,136 2,138 27,274 25,136 2,869 28,005
Additions 7,752 2,390 10,142 8,379 2,390 10,769
Transfers - - - 731 (731) -
Balance at 31 December 32,888 4,528 37,416 34,246 4,528 38,774
Balance at 1 January 7,373 - 7,373 7,373 - 7,373

Charge for the year 2,510 - 2,510 2,612 - 2,612
Balance at 31 December 9,883 - 9,883 9,985 - 9,985
Net Book Value 23,005 4,528 27,533 24,261 4,528 28,789
The Bank The Group
2018 Software Work In Software Work In

Total Total
Cost Cost Progress Cost Progress

Additions 1,957 - 1,957 1,957 - 1,957
Transfers - 2,138 2,138 - 2,869 2,869
Balance at 31 December 25,136 2,138 27,274 25,136 2,869 28,005


Charge for the year 2,116 - 2,116 2,116 - 2,116
Balance at 31 December 7,373 - 7,373 7,373 - 7,373

Net Book Value 17,763 2,138 19,901 17,763 2,869 20,632
106 2019
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28. LEASES
2019 2018
Right-of-use Assets
Recognition of right-use-asset on initial application of IFRS 16 87,841 87,841 - -
Additional right-use-asset recognised in current year 6,443 6,443 - -
Lease expense - depreciation on right-of-use asset (7,048) (7,048) - -
Balance at 31 December 2019 87,236 87,236 - -

Lease liability
Recognition of lease liability on initial application of IFRS 16 76,155 76,155 - -
Additional lease liability recognised in current year 6,443 6,443 - -
Lease expense - finance cost 4,585 4,585 - -
Total lease payments (9,971) (9,971) - -
Balance at 31 December 2019 77,212 77,212 - -

Lease expenses charged to comprehensive income
Depreciation on right-of-use asset 7,048 7,048 - -
Finance cost 4,585 4,585 - -
11,633 11,633 - -
29. DEPOSITS FROM BANKS AND OTHER FINANCIAL INSTITUTIONS

2019 2018
Current Account 57,253 49,708 25,918 21,570

Time Deposit 115,401 114,763 52,243 49,801
172,654 164,471 78,161 71,371
2019 107
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30. CUSTOMER DEPOSITS 2019 2018

Analysis by product
Current Account 1,989,792 1,989,792 1,689,452 1,689,452
Time Deposits 1,449,298 1,449,298 1,200,578 1,200,578
Savings deposits 255,423 255,423 188,652 188,652
3,694,513 3,694,513 3,078,682 3,078,682
Analysis by portfolio
Retail
Current Account 605,009 605,009 448,946 448,946
Time Deposits 810,364 810,364 531,503 531,503
1,669,563 1,669,563 1,167,291 1,167,291
Corporate
Current Account 1,381,378 1,381,378 1,240,506 1,240,506
Time Deposits 638,934 638,934 669,075 669,075
2,024,950 2,024,950 1,911,391 1,911,391
3,694,513 3,694,513 3,078,682 3,078,682

Analysis by type
Individual and other private enterprise 2,971,713 2,971,713 2,292,570 2,292,570
Public enterprises 722,800 722,800 786,112 786,112
3,694,513 3,694,513 3,078,682 3,078,682
Twenty largest depositors to total deposit ratio is 38% (2018: 24%).
108 2019
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31. BORROWINGS
2019 2018
Long-term borrowings
Agence Francaise De Development 38,853 38,853 - -
CitiBank New York 46,099 46,099 8,033 8,033
Finnfund 33,202 33,202 43,380 43,380
Ghana Export - Import Bank 32,331 32,331 41,124 41,124
GIB London - - 8,033 8,033
International Finance Corporation 159,094 159,094 216,900 216,900
Norfund 22,135 22,135 108,450 108,450
Overseas Private Investment Company (OPIC) 554,418 554,418 - -
PROPACO 83,006 83,006 28,920 28,920
The OPEC Fund for International Development (OFID) 4,257 4,257 11,123 11,123
973,395 973,395 465,963 465,963
Subordinated-term borrowings
PROPACO 147,023 147,023 141,082 141,082
147,023 147,023 141,082 141,082
Short-term borrowings
Africa Trade Finance 563,222 563,222 - -
CitiBank New York - - 32,730 32,730
Finnfund 34,874 34,874 30,897 30,897
Ghana Export - Import Bank 1,622 1,622 - -
GIB London 121,135 121,135 32,527 32,527
International Finance Corporation 90,552 90,552 79,191 79,191
Norfund 23,890 23,890 19,460 19,460
PROPACO 42,200 42,200 37,165 37,165
SSNIT 21,451 21,451 84,163 84,163
Stanchart London - - 170,213 170,213
Standard Chartered Bank - Accra - - 218,732 218,732
The OPEC Fund for International Development (OFID) 8,762 8,762 7,809 7,809
907,708 907,708 712,887 712,887

Carrying Amount 2,028,126 2,028,126 1,319,932 1,319,932
2019 109
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31. Borrowings (continued)
Africa Trade Finance - This is a facility granted by Africa Trade Finance for trade finance activities. Interest is at a rate
of 6 months Libor plus 2% margin per annum and matures in 2020.
Agence Francaise De Development - This is a facility granted by Agence Francaise De Development to support the
Sustainable Use of Natural Resources and Energy Financing (SUNREF) project. Interest is at a rate of 6 months Libor plus
2.05% per annum and matures in 2022.
CitiBank - This is a trade finance line of credit granted in 2019 to be exclusively used to finance eligible SME transactions.
Interest is set at 3 months Libor, plus 2.8% per annum maturing in 2022.
Finfund - This is a facility granted by Finfund for on-lending to SME’s, interest is at a rate of 6 months Libor plus 5.0%
per annum and matures in 2021.
Ghana Export and Import Bank – These are various facilities granted by the Ghana Export and Import Bank to be
extended to customers in the export sector. Interest is at a rate of 2.5% per annum.
Ghana International Bank – These are two facilities granted for on-lending to the private sector and general corporate
purposes. Interest is at a rate of 3 months US Libor plus 2.9% per annum maturing in 2020.
International Finance Corporation – These facilities were granted in 2017 and 2018 to be used to finance SME
transactions. Interest rate is 6 months Libor plus up to 5.0% per annum maturing in 2021 and 2022.
Norfund - This is a facility granted by Norfund for on-lending to SME’s, interest is at a rate of 6 months Libor plus 5.0%
per annum and matures in 2021.
Overseas Private Investment Company (OPIC) - This is a facility granted by OPIC for on-lending to SME’s. Interest
is at weekly US treasury bill rate plus 3.7% per annum and matures in 2031.
Proparco (Subordinated Term Loan) - This is a Tier 2 facility granted by Proparco. Interest is at a rate of 6 months
Libor plus 5.8% per annum maturing in 2024.
Proparco - This is a facility granted for on-lending to the private sector expiring in 2022. Interest is at a rate of 6 months
US Libor plus 4.4% per annum.
SSNIT – These are several intra-day and short-term facilities with maturity periods of up to one year. Interest rate is
tied to the respective treasury bill/note rates ruling on the day of borrowing. The weighted average interest rate on these
facilities is 18.17%.
The OPEC Fund for International Development (OFID) - This is a trade finance line of credit granted to be
exclusively used to finance eligible trade transactions. Interest rate is set at 6 months BBA Libor plus 4.0% per annum
maturing in 2021.
110 2019
CalBank
32. OTHER LIABILITIES

2019 2018
Creditors 55,748 57,470 56,987 58,559
Accruals 22,983 24,214 35,405 35,851
Recognised liability for other long-term employee benefit 10,446 10,474 32,399 32,453
Short-term employee benefits 111 111 343 408
Other liabilities 17,120 17,120 32,102 35,297
106,408 109,389 157,236 162,568
(a) Movement in the liability for defined benefit obligations

Liability for other long-term employee benefit at 1 January 32,399 32,453 34,541 34,587
Benefits paid by the plan (32,774) (32,774) (2,626) (2,626)
Expense charged to comprehensive income 10,821 10,795 484 492
Liability for other long-term employee benefit at 31 December 10,446 10,474 32,399 32,453
Expenses recognised in comprehensive income

Experience gains and losses (593) (627) 462 442
Net actuarial losses/profits recognised during the year (35) (36) (137) (142)
Current service costs 11,001 11,000 (132) (110)
Interest on obligation 448 458 291 302
10,821 10,795 484 492
Amounts related to executive directors included in

liability for defined benefit obligations 8,609 8,609 30,248 30,248
Actuarial assumptions
Principal assumptions at the reporting date (expressed in weighted averages)
2019 2018
Discount rate at 31 December 20.5% 20.5% 21.5% 21.5%
Future salary increases 15.0% 15.0% 15.0% 15.0%
Inflation rate 8.0% 8.0% 9.5% 9.5%
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 Salary Mortality

2019 Main Basis
return (2%) return 2% scale (2%) scale 2% (20%)
Actuarial Liability 10,446 10,750 10,176 10,258 10,643 10,450
Percentage Change n/a 3% -3% -2% 2% 0%
2018 Investment Investment Salary scale

Main Basis Salary scale 2% Mortality (20%)
return (2%) return 2% (2%)
Actuarial Liability 32,399 34,833 30,217 30,824 34,049 32,414
Percentage Change n/a 8% -7% -5% 5% 0%
2019 111
CalBank
32. 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 2019 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.
33. D
erivatives Assets Held For Risk Management
The Bank holds derivative financial instruments for risk management and trading purposes. The bank entered into forward exchange
contracts during the year. The fair value of forward exchange contracts is the amount of the mark to market adjustment at the reporting
date.
2019 2018
Instrument Type:
Foreign Exchange forward and spot contracts 4,115 4,115 - -
4,115 4,115 - -
Recognised gains on derivative assets 4,115 4,115 - -

4,115 4,115 - -
112 2019
CalBank
34. CAPITAL AND RESERVES

i. Stated Capital

2019 2018

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

Issued:
For cash 414,871 93,305 414,871 93,305
Transfer from Retained Earnings - 306,695 - 306,695
Bonus issue 211,714 - 211,714 -
626,585 400,000 626,585 400,000
There is no call or instalment unpaid on any share.

At 31 December 2019 the authorised share capital comprised 2 billion ordinary shares (2018: 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.
ii. Statutory Reserve Fund

2019 2018
Balance at the beginning 244,782 244,782 163,312 163,312
Transfer from Retained Earnings 43,571 43,571 81,470 81,470
Balance at the year end 288,353 288,353 244,782 244,782
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)
2019 113
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34. Capital And Reserves (Continued)
iii. Revaluation Reserve

2019 2018
At 1 January 63,526 63,526 63,526 63,526
Revaluatioin Gain 54,813 54,813 - -
Deferred Tax on Revaluation (13,703) (13,703) - -
At 31 December 104,636 104,636 63,526 63,526
This refers to the effects from the fair value measurement after deduction of deferred taxes on unrealised surplus/gains
on Property, Plant and Equipment. 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).
iv. Regulatory credit risk reserve
2019 2018
Specific Provision on Loans and Advances 164,652 164,652 165,412 165,412
General Provision on Loans and Advances 27,709 27,709 23,467 23,467
General Provision on Contingent Liabilities 1,571 1,571 2,773 2,773
Impairment Loss per Bank of Ghana requirment 193,932 193,932 191,652 191,652
Impairment Loss per IFRS requirement (202,154) (202,154) (175,610) (175,610)
Credit Risk Reserve - - 16,042 16,042
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.
v. Other reserves
a. Fair value reserve
2019 2018
Balance 1 January (17,918) (17,987) (7,163) (7,252)
Changes in FVOCI financial assets 9,027 9,027 (9,013) (9,013)
Experience gains and losses on other long-term employee benefit 1,950 1,869 (1,742) (1,722)
Balance at 31 December (6,941) (7,091) (17,918) (17,987)
b. Treasury Shares Bank Group Bank Group

Balance 1 January - (584) - (518)
Net Changes in Bank’s shares held by subsidiary - - - (66)
Total at 31 December - (584) - (584)
These are shares held by the subsidiaries as part of there trading portfolio.The subsidiaries at the end of the period held
as part of their trading stock 996,865 (2018: 996,865) CalBank shares
vi. Dividends

The Directors recommend the payment of a dividend of GHS0.089 per share (2018: GHS0.048 per share)
Net assets per share is based on 626,585,000 (2018: 626,585,000) ordinary shares at the statement of financial position
date.
114 2019
CalBank
35. CONTINGENCIES AND COMMITMENTS
(a) Letters of Credit, Guarantees and Indemnities

In common with banks, the group conducts business involving acceptances, guarantees, performance bonds and
indemnities.
The majority of these facilities are offset by corresponding obligations of third parties. The group also holds certain
securities in its own name on behalf of customers. The values of these securities are not recognised in the consolidated
balance sheet.
Letters of credit commit the group to make payments to third parties, on production of documents, which are subsequently
reimbursed by customers.
Guarantees are generally written by a bank to support performance by a customer to third parties. The group will only
be required to meet these obligations in the event of customer’s default.

Contingencies and commitments not provided for in the financial statements as at 31 December 2019 in respect of the
above amounted to GHS156.8 million (2018: GHS277.3 million) , as detailed below:

2019 2018
Letters of Credit 103,665 108,984
Guarantees and Indemnities 53,462 168,337
157,127 277,321
The amount of unsecured contingencies and commitments in respect of these at 31 December 2019 was GHS0.0 million
(2018: GHS0.0 million).
(b) Capital Expenditure

Capital commitments not provided for in the financial statements as at 31 December 2019 was nil (2018: nil million).

(c) Pending Legal Claims
At the year end there were some legal cases pending against the Group. Should judgment go in favour of the plaintiffs,
likely claims against the Group have been estimated at GHS21.4 million (2018: GHS 7.4 million). No provisions have been
made in the financial statements in respect of these amounts
(d) Assets Under Management and Custody

The group provides custody, trustee, investment management and advisory services to third parties, which involves the
group making allocation and purchase and sale decisions in relation to a wide range of financial instruments. Those assets
that are held in a fiduciary capacity are not included in these financial statements.

Assets managed by the Group on behalf of clients amounted to GHS1,164.5 million (2018: GHS908.2 million).

Assets under custody amounted to GHS1.89 billion (2018:GHS1.46 billion).

Those assets that are held in a fiduciary capacity are not included in these financial statements.
2019 115
CalBank
36. RELATED PARTY TRANSACTIONS
Related party transactions

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence
over the other party in making financial or operating decisions, or one other party controls both.

Subsidiaries
Details of principal subsidiaries are shown in Note 22.
Transactions with Directors and Key Management Personnel

Key Management Personnel are defined as those persons having authority and responsibility for planning, directing and
controlling the activities of CalBank Limited (directly or indirectly) and comprise the Directors and Officers of CalBank
Limited.
In the ordinary course of business, the Group makes loans to companies where a Director or other member of Key
Management Personnel (or any connected person) is also a Director or other member Key Management Personnel (or
any connected person) of CalBank Limited. These loans are made on substantially the same criteria and terms, including
interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and did not
involve more than the normal risk of collectibility or present other unfavourable features.
Details of transactions between related parties and the Group are as follows:
Details of lending to related parties are as follows:
Loans and Advances to Directors and their Associates 2019 2018
Balance at 1 January 284 1,126

Loans repayments received during the year (257) (842)
Balance at 31 December 27 284
Loans and Advances to Employees
Balance at 1 January 29,911 25,602

Loans advanced during the year 14,414 12,091
Loans repayments received during the year (12,879) (7,782)
Balance at 31 December 31,446 29,911
There were no loans and advances granted to companies in which Directors have an interests at the end of the year.
(2018: nil)
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.
116 2019
CalBank
36. Related Party Transactions (continued)

Included in deposits is GHS8.2 million (2018: GHS6.2 million) due to our subsidiary companies. Interest paid on deposits
from subsidiaries during the year amounted to GHS0.65 million (2018: GHS2.4 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.
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.
2019 2018
Salaries and other short-term benefits 11,949 6,981
Other long-term employee benefits 10,262 (857)
Employer social security charges on emoluments 620 564
22,831 6,688
Employee termination benefits

The Bank has contract with key employees that entitles them to terminal benefits of six months salary for every year
served.

2019 117
CalBank
37.

DIRECTORS’ SHAREHOLDINGS
The Directors named below held the following number of shares in the company at the year end.
2019 2018
NAME OF DIRECTOR No. of Shares % No. of Shares %
Frank Brako Adu Jnr. 16,223,544 2.59 16,094,944 2.57
Philip Owiredu 1,317,146 0.21 1,317,146 0.21
Paarock Van Percy 807,318 0.13 807,318 0.13
Kobina Quansah 15,419 0.002 15,419 0.002
18,363,427 2.93 18,234,827 2.91
38. ANALYSIS OF SHAREHOLDING AS AT THE YEAR END 2019

No. of % of
Shareholders Holding
1 - 1,000 16,440 71.28 8,584,663 1.37
1001 - 5,000 5,222 22.64 9,333,243 1.49
5001 - 10,000 565 2.45 3,740,175 0.60
10,001 - 20,000 340 1.47 4,564,000 0.73
20,001 - 30,000 145 0.63 3,544,166 0.57
30,001 - 40,000 72 0.31 2,550,034 0.41
40,001 - 50,000 29 0.13 1,302,727 0.21
Over 50,001 252 1.09 592,965,619 94.62

23,065 100.00 626,584,627 100.00

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
118 2019
CalBank
Twenty Largest Shareholders No. of %

Shares Holding
Shareholder
Social Security And National Insurance Trust 207,929,351 33.18
Arise B. V. 173,520,791 27.69
Scgn/Citibank New York Re Allan Gray Africa,
Ex - Sa Equity Fund Limited 25,276,798 4.03
Adu Jnr, Frank Brako 16,223,544 2.59
Mr Daniel Ofori 15,377,194 2.45
Scgn/Ntgs Se Lux Cl A/C Re Ludp Re: Aif Cl 8% Acc 15,340,782 2.45
Scgn/Citibank Kuwait Inv Authority 12,934,544 2.06
Std Noms/Bnym Sanv/Frontier Market Opport Mast Fun 8,909,271 1.42
Scgn / Enterprise Life Ass. Co. Policy Holders 8,023,807 1.28
Scgn/Enterprise Tier 2 Occupational Pension Scheme 7,016,872 1.12
Std Noms/Bnym Sanv/Kapfrg Investin Pro , Afrikansk 6,555,030 1.05
Scgn/Jpmorgan Bk Lux Sa Re Robeco Afrika Fonds N.v, 5,403,314 0.86
Scgn/Ssb Eaton Vance Tax-, Managed Emerging Market Fund 5,036,062 0.80
Egh/Enterprise Underwriters Tier 3 P4 4,314,614 0.69
Egh/Ecg Pension Scheme Tier 3 Port 1 4,215,839 0.67
Gentrust Sankofa Master Trust Scheme 3,085,714 0.49
Hfcn/ Edc Ghana Balanced Fund Limited 2,999,971 0.48
Ansah, Benjamin Fosu 2,938,915 0.47
Scgn/ U.p.s Bbg Staff Provident Fund Scheme 2,637,121 0.42
Scgn/Caceis Bank Lux Branch / Tcm Inv. Funds Luxe., 2,617,143 0.42
Top 20 Shareholders 530,356,677 84.64
Others 96,227,950 15.38

Grand Total 626,584,627 100.00%
2019 119
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39. VALUE ADDED STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018
2019 2018
Interest earned and other operating income 1,000,805 1,008,723 883,706 877,343
Direct cost of Services (506,832) (507,259) (451,080) (448,949)
Value added by banking services 493,973 501,464 432,626 428,394
Impairments (83,367) (86,066) (66,735) (66,735)

Value added 410,606 415,398 365,891 361,659
Distributed as follows: 410,606 415,398 365,891 361,659
To Employees:-
Non Executive Directors (5,142) (5,298) (1,556) (1,675)
Executive directors (17,302) (17,533) (4,755) (5,013)
Other employees (113,772) (117,046) (117,553) (120,351)
To Government:
Income tax (67,666) (69,527) (67,413) (69,690)
To providers of capital
Dividends to shareholders (30,077) (30,077) - -
To expansion and growth

Depreciation (29,929) (30,071) (9,558) (9,598)
Amortisation (2,510) (2,510) (2,116) (2,116)
Retained earnings 144,208 143,336 162,940 153,216
120 2019
CalBank
RESOLUTIONS TO BE PASSED AT THE 2020 ANNUAL GENERAL MEETING
The Board of Directors will propose the following ordinary resolutions, which will be put to the 2020 Annual
General Meeting for consideration and approval:
ORDINARY RESOLUTIONS
1. To receive and consider the accounts of the Bank, and the reports of the directors and the
external auditor thereon, for the year ended December 31, 2019
The Board will lay before the Annual General Meeting for consideration the audited accounts of the Bank
for 2019, and the reports of the directors and auditor thereon, as a true and fair view of the state of affairs
of the Bank for the year ended December 31, 2019, and will propose the following resolution:
• That the accounts of the company for the year ended December 31, 2019 and the reports of the
Directors and Auditor thereon be and are hereby deemed duly considered.
2. To re-elect to the Board of the Bank directors retiring by rotation
The following directors of the Bank, Ms. Rosalind Kainyah, Mr. Kofi Osafo-Maafo and Nana Otuo
Acheampong, will retire in accordance with section 325 of the Companies Act, 2019 (Act 992) and
clause 78(b) of the Amended Constitution of the Bank. Ms. Rosalind Kainyah, Mr. Kofi Osafo-Maafo and
Nana Otuo Acheampong, who are all eligible for re-election, have offered themselves to be re-elected as
directors of the Bank. The Board will recommend that they be so re-elected and will propose the following
resolutions:
(i) That Ms. Rosalind Kainyah, who is retiring by rotation and who, being eligible, has offered herself
for re-election in accordance with clause 78 of the company’s Constitution and section 325 of the
Companies Act, 2019, be and is hereby re-elected as a director of the company.
(ii) That Mr. Kofi Osafo-Maafo, who is retiring by rotation and who, being eligible, has offered himself
Companies Act, 2019, be and is hereby re-elected as a director of the company.
(iii) That Nana Otuo Acheampong, who is retiring by rotation and who, being eligible, has offered himself
Companies Act, 2019, be and is hereby re-elected as a director of the company
3. To re-elect a director appointed to fill a casual vacancy on the Board
On May 8, 2019, the Board appointed Mr. Kweku Baa Korsah as a director of the Bank, to fill a casual
vacancy on the Board. In accordance with clause 74(b) of the Bank’s Constitution, a director appointed to
fill a casual vacancy on the Board shall hold office until the following general meeting and shall be eligible
for re-election. The Board will accordingly propose the following resolution:
• That Mr. Kweku Baa Korsah be and is hereby re-elected as a director of the company.
4. To declare a dividend
The directors will recommend the declaration and payment of a dividend per share of GHS 0.089 for the
year ended December 31, 2019 to qualifying shareholders and will propose the following resolution:
• That the recommendation of the directors for the declaration and payment of a final dividend of
GHS 0.089 per share for the year ended December 31, 2019 be and is hereby approved.
2019 121
CalBank
5. To approve the remuneration of the directors

In accordance with section 185 of the Companies Act, 2019 (Act 992), the Board will request that
shareholders approve the remuneration of the executive and non-executive directors as respectively
disclosed in Notes 13 and 14 of the 2019 Annual Report of the Bank.
The Board, having approved a contract for the new Managing Director, Philip Owiredu commencing
January 1, 2020 will also seek shareholder approval for the remuneration of the Managing Director for
2020.
The following resolutions will be proposed:
• That in accordance with section 185 of the Companies Act, 2019, approval be and is hereby given for
the remuneration of the executive and non-executive directors of the Bank, as detailed in Notes 13 and
14 to the Financial Statements for the year ended December 31, 2019 and for the payment of non-
executive directors’ fees for 2020 at the same rates as for the previous year.
• That in accordance with section 185 of the Companies Act, 2019, approval be and is hereby given for
the contract and remuneration of the Managing Director, Mr Philip Owiredu on substantially the same
terms as existed in his previous contract as detailed in Note 13.
6. Authorise the directors to fix the fees of the external auditor

In accordance with section 140 of the Companies Act, 2019, the Board will request that they be authorised
to fix the fees of the external auditor, KPMG, for the year ended December 31, 2019. The following
resolution will be proposed:
• That the directors be and are hereby authorized to fix the remuneration of the auditor in respect of the
year ended December 31, 2019.

In order to protect shareholders’ value in the bank, the Board proposes a buy-back of shares by the Bank.
For this purpose, the Board will recommend to shareholders that the bank be authorised to purchase up
to 5% of its own shares, by passing the following resolution:
• That in accordance with sections 63 and 64 of the Companies Act, 2019 and clause 15 of the Amended
Constitution of the Bank, approval be and is hereby given for the purchase by the Bank of up to five
percent (5%) of the issued shares of the Bank.
122 2019
CalBank
Corporate Social Responsibilities
As a bank with a social conscience the Board and staff of CalBank are fully committed to the highest level of corporate
governance and social responsibility throughout every aspect of our business towards those stakeholders affected by our
business activities. This is because we believe in being involved in developing the community within which we operate.
As a business, we do our best to support the local communities. We thus try to focus our Corporate Social Responsibilities
(CSR) on 4 main areas. These are health, education, culture and sports development. The bank constantly invests in
community development activities that contribute to the overall well-being of the society. Underlisted are some of the
bank’s core objectives:
• To make a positive contribution to the underprivileged by supporting a wide range of health activities.
• To improve the level of education of the under privileged in society and contribute to the overall development of
education in Ghana.
• To promote arts and culture in Ghana.
• To develop and promote the lesser known sports as a means of fostering social integration.
CalBank in 2019 undertook various projects in line with our CSR initiatives across its various focus areas. Here are some
of the projects we undertook this past year.
Health
Health is the basis upon which life thrives and it is a human right. The provision of healthcare services and infrastructure is
another area we consider important. We have sponsored and supported worthy initiatives in the health services and have
participated in public health campaigns.
In a bid to support healthcare delivery in deprived communities, CalBank Staff donated the following neonatal equipment;
a Giraffe Carestation Incubator, Lullaby Infant Warmer Prime, Lullaby LED Phototherapy Unit and Bag and Mask
Resuscitator to the St. Martins De Porres Hospital, Eikwe in the Western Region. As part of the donation, the staff at the
Neonatal Care Unit were also trained on the use of the equipment.
2019 123
CalBank
The 2018-2019 batch of National Service Personnel at CalBank in their bid to make an impact on the health sector,
renovated the Male Infirmary Ward at the Accra Psychiatric Hospital with funds from their allowance. The National Service
Personnel also raised funds from corporate organisations and received support from the bank in the form of cash to
enable them to embark on the project. The renovation of the ward included changing the entire roof from asbestos to
galvanized aluminium sheets, ceiling replacements, fixing of new floor tiles, redesigning and fixing the entrance doors and
locks. The washroom, bathhouse and water closets for both staff and inmates were also reconstructed. The ward was also
furnished with new utility beds and new desks and chairs for the nurses. We always try to find ways to use our expertise
to further good causes in our communities.
Before
After
124 2019
CalBank
The CalBank team also supported the Aborah Sikah Catholic Clinic in Wawase where they presented a 250KVA genset to
help in the daily operations of the clinic. Over the years, the clinic had faced numerous challenges and through the initiative
of bank staff, they were able to mobilize funds to procure the genset.
Education
At CalBank, we believe education helps alleviate poverty and builds a sustainable skilled workforce for the community. We
further believe ensuring the underprivileged are well educated and equipped to become useful to the society is a better
investment. Thus, the bank’s decision to ensure that major contribution of its community involvement budget is dedicated
to supporting our needy children’s educational project.
We constantly support Needy Homes across the country beyond just providing financial and material assistance to the
homes. We support the brilliant students through to their tertiary education. Upon completion, they are given an opportunity
of internship with the Bank which normally ends in employment or in whichever endeavour of their preference.
The Bank has also taken a keen interest in the educational sector and constantly looks to award deserving students with
cash prizes and scholarships as a means to encourage hard work and support brilliant but needy students as well. By
awarding outstanding students in the University of Ghana, we’ve pushed others to develop a passion for learning. Our
belief is that education is one of the keys to alleviate poverty in the communities. That is why CalBank partnered with
the University of Ghana last year to award some of the best students at the 2019 Academic Awards Ceremony. The best
graduating students were awarded with cash prizes for their performance.
The Bank was also involved in providing funds towards the Otumfuo Osei Tutu Charity Foundation for a scheme that
would help deprived children in basic schools access to books and reading materials. The Bank raised funds towards this
project.
2019 125
CalBank
Culture
As a bank, we view culture as an integral part of our corporate social responsibility initiatives. Our main aim with respect
to culture is to preserve, sustain and integrate the regal, traditional and cultural values and practices to accelerate wealth
creation and harmony for total national development.
Over the years, we have promoted and invested in the arts and culture in Ghana. We believe culture brings people together
and we are proud to support cultural activities as it builds unity and fosters good relationships among the Ghanaian people.
At CalBank, we believe that culture is the backbone of the society and a fundamental part of our CSR programs. We are
therefore proud to support cultural activities and remain involved in the country’s cultural institutions.
Sports Development
CalBank has affirmed its continuous support to communal and lesser known sports in Ghana such as beach soccer and
basketball. We also support the development of golf and the National Cricket Association especially with the strategy of
empowering the young through sports.
CalBank has over the past years supported beach soccer in Ghana. Its role as a sponsor is to make sure that the right
resources are available for the coastal teams to be able to compete in the sport and bring people together to have fun.
In 2019, the bank supported the Ghana Beach Soccer Association with funds and other logistics to be allocated towards
the development of the domestic league. This is in line with the company’s CSR drive of promoting lesser known sports
and sports development.
126 2019
CalBank
CalBank officially partnered the 2019 edition of the Universities, Polytechnics and Colleges (UPAC) Basketball Championship.
The sponsorship came at a time when it had become necessary for substantial investments to be committed to the sport.
It was also important for the bank to sponsor the tournament as it would help keep the youth active and involved in
sporting activities.
CalBank is also heavily invested in the promotion of golf. The bank supported the 62nd Asantehene Golf Tournament held
in Kumasi at the Royal Golf Club. The tournament hosted over 350 golfers and other sports enthusiasts and coincided
with the 20th anniversary coronation of the Asantehene.
2019 127
CalBank
The bank supported the Achimota Golf Club by organising the 2019 CalBank Open which gave professional and amateur
golfers all over the country a chance to participate in the competition.
Last year, the bank was involved in supporting Techiman City FC as they featured in the Normalization Committee Special
League Cup of the Ghana Football Association.
The bank will continue to embark on such projects all year round to ensure that it helps to improve the lives of the people
in the country.
The bank total support to our community engagement amounted to GHS707,827.
128 2019
CalBank
PROXY FORM
VIRTUAL ANNUAL GENERAL MEETING to be
Resolutions from the Board For Against
held at 10 a.m. on Wednesday, 24 June 2020 and
streamed live from the Head Office Conference 1. To receive the 2019 Accounts.
Room. 2. To re-elect Ms. Rosalind Kainyah as a
director of the Bank.
3. To re-elect Mr. Kofi Osafo-Maafo as a director
I/We ……………………………………...........................................................…
being a member(s) of CalBank Limited of the Bank.
hereby appoint 4. To re-elect Nana Otuo Acheampong as a director

of the Bank.
5. To re-elect Mr. Kweku Baa Korsah as a director
*………………………...................................................................…………………… of the Bank.
or failing him/her the Chairman of the Meeting as 6. To declare a dividend

my/our Proxy to vote for me/us and on my/our
7. To approve directors’ remuneration.
behalf at the Virtual Annual General Meeting of
the company to be held on 24 June 2020. 8. To authorise the Directors to fix the fees of the
external auditor.

Signed this …...................…..day of …….............…… 2020
Please indicate with an ‘X’ in the appropriate box how you wish your votes
to be cast on the resolutions set out above. Unless otherwise instructed the
proxy will vote or abstain from voting at his discretion.
…………………………………………….....…
Shareholder’s Signature
NOTES:
1. In compliance with the current restrictions on public gatherings in force pursuant to the Imposition of Restrictions
Act, 2020 (Act 1012) and consequent regulatory directives, attendance and participation by all members and/or their
proxies in this year’s annual general meeting of the Bank shall be strictly virtual (i.e. by online participation).
2. A member entitled to attend and vote at the annual general meeting may appoint a proxy to attend (via online
participation) and vote on his/her behalf. Such a proxy need not be a member of the Company.
3. The appointment of a proxy will not prevent a member from subsequently attending and voting at the meeting (via
online participation). Where a member attends the meeting in person (participates online), the proxy appointment shall
be deemed to be revoked.
4. A copy of the Form of Proxy can be downloaded from: https://calbankagm.net and may be filled and sent via email
to: info@csd.com.gh or deposited at the registered office of the Registrar of the Company, Central Securities Depository
(CSD) Ghana Limited, 4th floor, Cedi House, Accra or posted to the Registrar at PMB CT 465 Cantonments, Accra
to arrive not later than 10.00 GMT on Monday, June 22, 2020.
5. Accessing and Voting at the Virtual AGM
A unique token number will be sent to shareholders by email and/or SMS from June 5, 2020 to give them access
to the meeting. Shareholders who do not receive this token can contact the CSD on: info@csd.com.gh
or call 0302 906 576 / 0303 972 254 any time after June 5, 2020 but before the date of the AGM to be sent
the unique token.
To gain access to the Virtual AGM , shareholders must visit https://calbankagm.net and input their unique token
number on Wednesday, June 24, 2020. For shareholders who do not submit proxy forms to the Registrar of the
Company prior to the meeting, they may vote electronically during the Virtual AGM again using their unique token
number. Further assistance on accessing the meeting and voting electronically can be found on
https://calbankagm.net .
2019 129
CalBank
130 2019
CalBank
2019 131
CalBank
132 2019
Our Branches
Ashanti Region Legon Branch
Adum Branch Osu Branch
Asafo Branch Ring Road Central Branch
Kejetia Branch Spintex Road Branch
KNUST Branch Tema Community Branch
Nhyiaeso Branch Tema Community 25 Branch
Suame Branch Tema Main Branch
Weija Branch
Greater Accra Region Northern Region
Achimota Branch Tamale Branch
Airport City Branch Western Region
Dansoman Branch
Derby Avenue Branch Ainyinase Agency
East Legon Branch Esiama Branch
Graphic Road Branch Sekondi Branch
Independence Avenue Branch Takoradi Harbour Branch
Kwame Nkrumah Avenue. Branch Takoradi Market Circle Branch
Labone Branch Tarkwa Branch
T: +233 (0) 302 680061-69, +233 (0) 302 680079 Mobile Banking *771#
F: +233 (0) 302 680081, +233 (0) 302 680083
A: 23 Independence Avenue P.O.Box 14596 Accra
E: customercare@calbank.net | www.calbank.net
Call us Toll free on
0800 500 500

+233 302 739 900 (from international line)
You love them all, you got them.

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CalBank

‘we are together as one, for the future

• Values – Responsible, Effective, Decisive (RED) •

Notice of Annual General Meeting 3

Four-Year Group Consolidated Financial Summary 4

Profile of Board of Directors 6

Managing Director’s Report 14

Report of the Directors 18

Corporate Governance Statement 22

Independent Auditor’s Report 34

Statements of Comprehensive Income 39

Statements of Financial Position 40

Statements of Changes in Equity 41

Statements of Cash Flows 43

Notes to the Financial Statements 44

Resolutions to be Passed 121

Corporate Social Responsibilities 123

Proxy Form 129

NOTICE OF ANNUAL GENERAL MEETING

2. To re-elect to the Board of the Bank directors retiring by rotation

3. To re-elect a director appointed to fill a casual vacancy on the Board

• Mr. Kweku Baa Korsah

5. To approve the remuneration of the directors

6. Authorise the directors to fix the fees of the external auditor

7. To approve the Purchase of Shares of the Bank

Dated this 6th day of February 2020

BY ORDER OF THE BOARD

VERITAS ADVISORS LIMITED

FOUR-YEAR GROUP CONSOLIDATED

2019 2018 2017 2016

Interest Income 912,409 773,270 668,128 557,631

BOARD OF DIRECTORS Paarock Asuman VanPercy (Chairman)

SOLICITOR Reindorf Chambers

REGISTRAR Central Securities Depository (GH) Limited

REGISTERED OFFICE 23 Independence Avenue

Chairman’s Report (Continued)

local brand and the loyalty of our valued customers 100,000

Share Price Performance

a strong capital position with a minimum paid-up 1.00

capital of GHS400 million as required by regulation 0.80

Chairman’s Report (Continued)

Changes in the Board of Directors

Chairman’s Report (Continued)

MANAGING DIRECTOR’S REPORT

Managing Director’s Report (Continued)

compared to GHS230.3 million recorded in 2018. 2,000,000

Similarly, the Bank’s profit after tax increased by 1,000,000

7% to GHS174.3 from GHS162.9. 0

financing mix with more long -term debt continue

Française De Developpement, Overseas Private 500,000

Investment Corporation and CitiBank totaling 400,000

Other Income Commission & Fees Net Interest Income

Your Bank’s total shareholders’ equity increased by

16.5% the previous year after the implementation of

Managing Director’s Report (Continued)

The year 2019 was yet another remarkable period

with our strategy of building a digital bank, with 1,000,000

the introduction of various e-product and process 800,000

channel in the course of the year, immediately 400,000