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Cal Bank confirmed senior management dismissals, clarified no board members were dismissed, and addressed delayed director appointments due to a legal injunction.

Cal Bank has confirmed the dismissal of several senior-level managers, as reported by The High Street Journal, but clarified that no board members were dismissed. The bank explained that recent changes to its Board were due to the natural expiration of directorship terms, in line with its governance protocols.

In a statement signed by Board Chairman Joe Mensah, Cal Bank said that three directors had concluded their terms. Of these, two directors completed their tenure, while the third chose not to seek renomination. The bank also explained that the appointment of new directors has been delayed due to a legal injunction filed by two minority shareholders, affecting certain resolutions at its Annual General Meeting (AGM). To resolve this, Cal Bank plans to hold an Extraordinary General Meeting (EGM) to appoint new directors and fully restore its board.

Regarding the termination of senior management appointments, the bank stated that ” In keeping with the Board’s commitment to upholding the core principles of transparency and accountability at all levels of the bank, a number of senior-level management appointments were terminated or reassigned in June 2024 in accordance with due process.”

Cal Bank also addressed its financial challenges, acknowledging the impact of legacy issues on its performance. The statement emphasized that the current board has introduced various initiatives aimed at stabilizing the bank, including improving risk management, making provisions for troubled legacy accounts, and aggressively pursuing the recovery of non-performing loans.

Earlier in 2024, Cal Bank’s financial troubles came to light when impairments significantly reduced its capital base, prompting the bank to launch a rights issue to raise GH¢600 million. However, the bank managed to raise only GH¢145.8 million. The process was further complicated when major shareholder Daniel Ofori took legal action, claiming inadequate disclosure of the impairments. This legal challenge led to a suspension of the rights issue until a settlement allowed the transaction advisors to proceed.

Following the shortfall in the rights issue, Cal Bank turned to a private placement to raise the remaining GH¢454.2 million to meet its capital requirement. Although potential investors were identified by July, a deal has yet to be finalized.

Despite these challenges, the bank reported a significant recovery in the first half of 2024, with a 49.4% increase in profit after tax. Additionally, the bank saw a reversal in its shareholders’ equity, improving from a negative GH¢18.49 million at the end of 2023 to a positive GH¢112.9 million by June 2024, largely due to the funds raised from the rights issue.

As one of the last remaining non-state indigenous banks in Ghana, Cal Bank has played a pivotal role in the financial sector for over three decades. Despite successfully navigating the recent banking sector cleanup, the bank now faces one of its most significant challenges. Market observers are hopeful that the Bank of Ghana will support Cal Bank’s board and management in regaining financial stability.

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