Development Partners International (DPI) has backed an investment into Ghana-based CAL Bank, in a deal valued at approximately $39.1 million (GHS 75million).
DPI has acquired 28.97% of the bank while French development finance investor Proparco, has bought 6.86%. Ghana’s Social Security and National Insurance Trust has retained its 33.18% stake in CAL Bank. DPI structured the deal through its African Development Partners I fund, headed by Runa Alam [pictured].
The deal was arranged through a private placement, which was twice oversubscribed. Ghana-based IC Securities provided corporate finance advice to CAL Bank on the deal.
The investment lifts the bank’s capital base to GHS 100 million, exceeding the GHS 60 million minimum capital requirement set by the Bank of Ghana. The central bank has set 31st December 2012 as the deadline for local banks to meet the new requirement.
Part of the funding will also go into supporting the bank’s growth strategy which includes beefing up its corporate banking and finance units, to meet growing demand from the oil & gas, energy, mining and telecommunications sectors. The bank is also working on developing its treasury product line to boost its trade finance support services.
The capital will also go into information technology infrastructure, which includes process automation. The bank is also looking to develop its retail base, with an increased offering in asset backed lending. CAL Bank is additionally working on bolstering its delivery channels through the growth of its electronic and branch network.
Based in Accra, CAL Bank operates through 18 branches across Ghana. The bank offers 48 automated teller machines and also offers wholesale banking services to corporate clients. CAL Bank recorded a 161.2 % year-on-year rise in profits after tax in its 2011 financial year, which was supported by a 62.1% increase in operating income growth. The bank commenced operations in 1990.