Cal Bank, one of Ghana’s high profile indigenous banks, has taken drastic measures to address its financial woes by sacking several top managers.
The move is aimed at correcting previous impairments and restoring the bank’s capital base, according to a report by The High Street Journal.
The Sacked Executives
According to sources, the executives who lost their positions include the Head of Treasury, Head of Finance, Head of Custody, Executive Head of Finance and Operations, Chief Risk Officer, and Head of Business Development.
Additionally, the Head of Fixed Income and the Head of Corporate Banking were also let go.
Reasons Behind the Sack
The sackings are reportedly linked to a GH¢1.5 billion loan facility that went bad, with suspicions of internal collusion among the affected executives.
This development follows the recent appointment of a new Managing Director, whose predecessor was reportedly pushed to retire in earlier restructuring efforts.
New Leadership
To address the leadership gaps created by these firings, the bank has engaged an experienced banking consultant to help find suitable replacements for the sacked officials.
The Bank of Ghana has set a deadline for CalBank to resolve its internal issues by the end of November 2024.
Financial Troubles
Cal Bank’s financial troubles became evident earlier this year when it faced serious impairments that greatly reduced its capital.
The bank initiated a rights issue to raise GH¢600 million but only managed to raise GH¢145.8 million, barely exceeding the minimum threshold of GH¢120 million required.
Private Placement
Following the shortfall, CalBank turned to a private placement to secure the remaining GH¢454.2 million needed to meet its capital requirement.
Potential investors were identified by July, but the bank has yet to finalize a deal.
Signs of Recovery
Despite the challenges, CalBank reported a significant financial recovery in the first half of 2024, with profit after tax rising by 49.4%.
The reversal of shareholders’ equity improved from a negative GH¢18.49 million at the end of 2023 to a positive GH¢112.9 million by June 2024.
BY Daniel Bampoe
