In order to strengthen the bank’s financial stability and increase shareholder interest, CalBank Plc has set a lofty goal to recover GH¢900 million in impaired loans by the end of 2024.
With significant recoveries from clients in the hospitality, construction, and services sectors, the bank has recovered GH¢712.5 million so far.
This loan recovery effort is in line with CalBank’s plan to preserve capital while strengthening its balance sheet, which is especially important in light of the difficulties facing the banking industry recently.
The bank has taken a proactive stance in loan recovery, combining the sale of collateral assets with legal actions.
In comparison to the GH¢63 million gain recorded for the same period in 2023, CalBank reported a substantial net impairment gain of GH¢232.7 million for the third quarter of 2024 on its financial instruments.
The bank’s focused efforts to recover value from targets of GH¢900m by year-end in its impaired loans portfolio are responsible for this improvement.
Following CalBank’s participation in the government’s Domestic Debt Exchange Programme (DDEP) rounds 1 and 2, the bank’s management says these gains were the consequence of a GH¢25.7 million reversal in bond impairments and the successful collection of GH¢207 million from previously written-off or provisioned accounts.
According to Carl Asem, Managing Director of CalBank Plc, this recovery is the result of a targeted approach to actively recover past-due amounts in order to lessen the effects of prior impairments.
In light of ongoing sectoral challenges, Mr. Asem further underlined that the bank’s commitment to an assertive recovery plan reflects CaBank’s commitment to strengthening its capital base and avoiding additional shareholder duties, which is a source of concern for investors.
CalBank protects its financial standing and shareholder interests by making sure debtors fulfill their obligations.
CalBank had recovered about GH¢505 million by the end of the first half of the year, and this rate increased even more in Q3, reaching GH¢712.5 million in total recoveries.
This trajectory has strengthened CalBank’s confidence in reaching the GH¢900 million year-end goal.
The bank has reevaluated its lending strategy in tandem with recovery efforts.
The bank has since changed to a more diversified portfolio, with a larger percentage of loans going to individual customers and small and medium-sized businesses (SMEs).
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