CAL Bank Ltd – Facts Behind The Figures 2012

Ghana Stock Exchange

30 May 2012

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– Ghana - The Economy & Banking Sector

– CAL Bank Investment Proposition

– CAL Bank Financial Highlights ( Q1 - 2012)

– CAL Bank Financial Performance (Q1-2012)

– Risk Management

– Future Strategy and New GHS 75 m Capital

– Q & A

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Presentation Outline

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The Ghanaian Economy & Banking Industry

• Growing GDP (2010 :8.0% vs. 2011: 14.4%)

• Positive Impact of oil revenues on the economy

• BOG regulatory minimum GHC 60m stated capital - by end 2012.

• Banking industry assets grew 28.6% to GHS 22.6 billion in 2011 driven by increased deposits to GHS 16 billion in 2011 from GHS 11.9 billion in 2010

• Banking Industry’s Capital Adequacy Ratio in 2011 of 17.4% well above statutory level of 10%

• Outlook - 2012

– Positive Outlook - IMF forecast average annual GDP of 7.4% for 2012-2017 – Forecast strong economic growth from cocoa, gold , telecoms, infrastructure

and emerging Oil & Gas Industry will drive growth in banking industry.– Corporate sector will directly benefit from expanding economy

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• Successful 2012 GHS 75 million private placement

• 4 quarters sustained strong earnings , good capital adequacy & liquidity, reduction in NPLs and tremendous balance sheet growth

Solid Capital for future growth

• Continued focus on securing and maintaining growing corporate clients in the Ghanaian economy

• New capital enables CAL increase trade activity and risk assets thereby increasing profitability

Leading local Corporate Bank

• Rigorous risk management underpinned by Basle II framework

• Historically and still below industry-average for NPL’s . Robust Risk Management

• 2011 Dividend payout ratio of 35.2%

• Consistent high dividend pay-out ratioDividend Payout

• Consistent improvement in rates of return since 2009

• Current Q1 2012 ROAA=4.6% and Q1 2012 ROAE =34.7%Return on Equity

CAL Bank - The Investment Proposition

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• GHS 75 m transaction, more than 2X oversubscribed

• Major new investors in top 10 shareholding

• African Development Partners I, PE Fund

• PROPARCO of France

• Social Security and National Insurance Trust (SSNIT)

Successful GHS75 m

private placement

•Growth in Non-Interest Revenue due to strong growth in international trade finance and forex income

•Growth in higher quality Corporate loan book

• Prudent cost management

Key drivers

Bank Financial Highlights - First Quarter 2012

1st Quarter 2012 - Profit and Loss

Key Ratios Q1 2012 Q4 2011 Q1 2011

Earnings per share 0.0315 0.0345 0.0141

Return on Average Equity (%) 34.7% 40.6% 18.1%

Return of Average Assets (%) 4.6% 5.3% 2.8%

Capital Adequacy 10.5% 11.6% 14.5%

Cost-to-income Ratio 41.4% 41.0% 48.9%

Q1 2012 The Bank (GH¢ 000’s)

Indicators Q1 2012 Q4 2011 Q1 2011Var.

Q1/Q4

Var.

Q1/Q1

Net Interest Income 12,570 12,868 9,579 (2.3)% 31.2%

Net Fees & Commissions (GH¢ ) 4,292 3,546 3,156 21.0% 36.0%

Other Income (GH¢ ) 4,917 7,889 2,037 (37.7)% 141.4%

Total Income (GH¢) 21,779 24,303 14,772 (10.4)% 47.4%

Total Operating Expense (GH¢) (9,019) (9,975) (7,227) 9.6% (24.8)%

Impairment Charge (2,320) (3,405) (2,605) 31.9% 10.9%

Profit Before Tax (GH¢) 10,439 10,923 4,940 (4.4)% 111.3%

Profit After Tax (GH¢) 7,830 8,572 3,458 (8.7)% 126.4%

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1st Quarter 2012 - Balance sheet

Q1 2012 The Bank (GH¢ 000’s)

Indicators Q1 2012 Q4 2011 Q1 2011Var.

Q1/Q4

Var.

Q1/Q1

Total assets 843,705 786,063 524,884 7.3% 60.7%

Loans and Advances 509,732 412,565 258,302 23.6% 97.3%

Fixed Assets 29,519 29,424 27,271 0.3% 8.2%

Total Liabilities 743,471 693,142 444,494 7.3% 67.3%

Customer Deposits 558,840 564,396 309,505 (1.0)% 80.6%

Shareholders Funds (GH¢) 100,234 92,921 80,391 7.9% 24.7%

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Key Ratios Q1 2012 Q4 2011 Q1 2011

Earnings per share 0.0315 0.0345 0.0141

Return on Average Equity (%) 34.7% 40.6% 18.1%

Return of Average Assets (%) 4.6% 5.3% 2.8%

Capital Adequacy 10.5% 11.6% 14.5%

Cost-to-income Ratio 41.4% 41.0% 48.9%

Risk Management

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Q2,2011 Q3,2011 Q4,2011 Q1,2012

NPL Ratio %

1010101011111111111212

Q2,2011 Q3,2011 Q4,2011 Q1,2012

Capital Adequacy %

• Risk Management

• Governed by clearly defined, communicated risk

management policies under the Basel II framework.

• Risk Management sub-committee of the Board in

place.

• Asset and Liability Management Committee

responsible for managing Liquidity, Currency,

Concentration and Interest rate risk

• Capital adequacy - strict compliance with BOG 10%

minimum

• Concentration - strict adherence to BOG single

obligor limits of 25% of shareholders’ funds

• Related parties exposure monitored by the Bank’s

Asset and Liability Committee.

• Related parties are strictly arms-length commercial

transactions.

Commentary NPL - estimated Industry Average Q1 2012 is 13%

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• Expand & strengthen Corporate banking and corporate finance loan portfolio

• Focus on growing sectors - oil and gas, energy, mining & telecoms

Corporate Banking

• Strengthening treasury activities

• Capitalise on trade finance opportunities from growth in economic activities

• Develop & promote relevant treasury products for our clientele

Treasury

• Develop sound retail portfolio

• Focus on asset backed lending e.g. mortgages

• Investment in alternative delivery channels to spread our foot print

• improve on brand visibility

Retail portfolio

• Reduce cost of funds/deposit concentration by increasing retail deposits

• Expand Bank’s operational network in strategic areas

Cost of funds

• Enhance IT infrastructure to augment its service quality.

• Focus on process automation, enhancing management information systems and investments into modern communication systems

IT Infrastructure

Defined Future Growth Strategy based on “Scaling-Up”

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• Increase in Single Obligor Limit (“SOL”) – On receiptof the new capital, CAL Bank’s SOL will be significantlyboosted as the additional equity will enable the Bank toincrease its exposure limit to any single party andtherefore increase its lending capacity. This will ensurethat the Bank takes advantage of the existingopportunities in the oil and gas, energy, infrastructure,telecoms and utility sectors, which typically are largertransactions.

• Exceeding the minimum statutory capitalrequirements With the new stated capital of GHS 100m,CAL Bank will exceed the BoG GHS60m capitalrequirement, giving the Bank an edge by an increasedcapacity to serve Ghana’s expanding economy

• Increase balance sheet flexibility – CAL Bank willleverage this new equity to access cheaper funding fromDevelopment Finance Institutions (“DFI”) to furtherstrengthen its balance sheet for growth. Based on theBank’s existing relationships with various DFIs, the Bankexpects to leverage the additional equity at least 3x timesto fund its foreign currency portfolio. This will improve theBank’s open forex positions and capital adequacy ratio.This will enhance trade activity and increase risk assetsthereby increasing profitability

Working capital – The Bank currently has over GHS 100million of lending opportunities across several sectorsincluding oil and gas, telecom, infrastructure, trade andenergy. The Bank will apply a significant amount of the newcapital to fund this transaction pipeline.

Branch Network Expansion – CAL Bank will invest inadditional full service branches and alternative deliverychannels including ATMs to aid in the mobilisation of retaildeposits, widen its footprint and enhance brand visibility.The Bank has targeted a total branch network of 30 and 100ATMs by 2015. This will serve to increase access to retaildeposits and reduce the Bank’s cost of funds.

Investment in IT Infrastructure – CAL Bank will invest inadditional technological platforms to improve servicedelivery to both corporate and retail clients. Key investmentsinclude process automation, improvement in hardware andcommunication infrastructure.

Benefits of our new increased capital

Uses of Funds

New Capital from Private placement

CAL Shareholder Profile - Pre & Post Private placement 2011

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Pre Private placement 2011

Name Shares %

1 SSNIT 82,363,074 33.47

2 Afare A Donkor 18,120,000 7.36

3 Daniel Ofori 13,455,045 5.47

4 Vanguard Assurance 9,801,798 3.98

5 Kura Africa Fund 8,163,900 3.32

6 Frank Brako Adu 7,433,876 3.02

7 SSB Eaton Vance 3,266,254 1.33

8 Frontier Market 2,720,580 1.11

9 Duet Africa 2,707,321 1.10

10 AIG Sub Saharan 2,600,000 1.06

Top 10 150,631,848 61.22

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Name Shares %

1 SSNIT 181,913,182 33.18

2 ADP 1 158,817,892 28.97

3 Proparco 37,632,000 6.86

4 CAL Brokers 19,845,335 3.62

5 Daniel Ofori 13,455,045 2.45

6 Vanguard Assurance 9,801,798 1.79

7 Kura Africa Fund 8,602,200 1.57

8 Frank Brako Adu 8,485,776 1.55

9 Robeco Afrika 3,914,900 0.71

10 Fulcrum Africa 3,904,300 0.71

Top 10 446,372,428 81.33

Post Private placement 2012

Thank You

Questions & Answers