How former Cal Bank MD became the 5th largest shareholder of bank

Have you ever wondered how an individual with no banking blood in his veins could transform a fledgling bank in ten years?

Frank Brako Adu Jnr, a native of old Tafo seems to have an innate instinct for what works – and what does not – at a bank. Both his father, a Presbyterian disciplinarian and mother were not finance people.

Indeed, both started off as teachers. More than that, Frank had a surgical approach to running a business, forged early in his career as a teaching assistant at Legon to becoming Managing Director at the age of 38.

The long serving Managing Director of Cal bank until his retirement last year was one of the most outspoken voices in finance. I dare say that few men ever commanded such reverence and respect in an industry as Frank Adu did in Ghana’s banking Industry. And people listened when he spoke.

That perhaps may be because he has a rare mix of charisma and intelligence. But it is mostly because he has earned the right to be listened to, having positioned Cal Bank as one of the most powerful and successful indigenous Ghanaian banks.

The Frank Adu story may have been told, but many of the statistics that back up the tale are not well known, so here is a brief summary.

30 years ago, on a sunny and bright morning in March, 23 people including Frank Adu walked into the offices of the then Continental Acceptances Limited at Pegasus House as Senior analyst, that saw the birth of Cal Bank.

In July of the same year the bank received its license to operate with 30 employees. The eye for detail and perseverance made him the blue-eyed boy of Management who hired and promoted him to treasurer in 1993. He was later appointed Deputy Managing Director in 1999 and rose to become Managing Director a year after.

Prestigious as it seemed, for Frank it was not about salaries or bonuses. It was about governance and compliance. He believed that Cal Bank could not be treated as just any other bank

So, a decade after his appointment as Managing Director the company had grown from just one to 14 branches with a thousand-fold increase in its customer base to 50,000 customers. The banks single-obligor limit had also increased by over a thousand percent to $10m while the number of shareholders also increased from five to over 23,000, following a highly successful Initial Public offering(IPO),listing the Bank on the Ghana stock Exchange which was oversubscribed by over 400 percent.

The 2009 global financial crisis appears to be one of the most challenging periods in Ghana’s recent economic history resulting in a slowdown of GDP to 4.2 percent from 7.1 percent the previous year.

Despite the challenges, the bank realized a modest increase in profitability and a significant growth in its balance sheet size. And a lot of that is down to Frank Adu. The story of Cal Bank, of course, is not just about Frank Adu. It is a story of many of the pioneering founders including founding Chief Executive, Afari Donkor, founding Chairman EPL Gyampoh and Nana Awuah Darku Ampem I. It is also about the hordes of dedicated and committed group of professionals, both male and female who supported and carried Frank.

Frank Adu became much more than a Managing Director. He was also a public figure. His annual MD’s report will often opine not just on the banking industry but also about issues close to his heart in the Ghanaian economy and politics. Some peers saw him as a no-nonsense person.

5th June 2008 will forever be etched in the history books of Frank Adu as his efforts to increase the stated capital of the bank to 200 million dollars almost ended his career at Cal Bank. An Extraordinary General Meeting which was called ostensibly to fire him as Managing Director, turned otherwise thanks to the intervention of majority shareholders who voted to maintain him. In an interview granted to me on TV3’s ‘Time with the Captains’ Mr. Adu recounts the failure of the corporate action brought against him after majority of shareholders rejected a resolution to remove him.

“At the time I had gone to the Annual General Meeting earlier in the year, I think in April to increase the stated capital of the bank from what it was then I don’t remember the figure to 200 million dollars which basically had been arranged” he tells me.”raising the money was not a problem but securing the support of shareholder’s was going to be a challenge.” The plan to increase the banks stated capital was however shot down at the AGM and subsequently an unnamed shareholder called an Extraordinary General Meeting demanding he be sacked for being “reckless and ambitious”.

“In our part of the world or in what we do, it’s a very unforgiving world and promises are broken, minds can be changed overnight, I don’t want to go into the details, maybe when I write my memoirs I will go into the details of it ,but suffice it to say the resolution was shot down at the AGM”. Mr. Adu tells me. Mr. Adu who does not regret his intentions to increase the banks stated capital then believes that singular action if taken in 2008 would have made Cal Bank stronger and immune from the Bank of Ghana’s new 400 million recapitalization efforts in 2019.

Frank Adu is credited with the transformation of Cal Bank to a strong financial institution and among the big players in the country’s banking sector as he steered the banks effort’s in meeting the 400 million cedi’s minimum capital requirement by the bank of Ghana, one of the few local banks to have survived the regulators new reforms . Frank Adu hardly had a blot, at least publicly, either from the regulators or from customers unlike some local rivals. He was a man of compliance and seldom took giant risks to grow.

He is credited with repositioning Cal Bank to respond to the growing and ever-changing face of banking-largely driven by technology and investing in productive sectors of the economy and by the end of his tenure, Mr. Adu Jnr had transformed the bank from a small corporate-focused bank to a universal bank with 28 branches and about 850 employees and a balance sheet well in excess of GHS 7 billion in assets.

One of his greatest achievements despite supervising the bank’s new ultra-modern iconic tower building, helping to meet the bank of Ghana’s new capital requirement and maintaining a formidable bank with a strong balance sheet has been to create a well-defined, positive culture in the bank which is alien to many local firms

He also positioned himself as a champion of the positive role that banking can play in society. Frank’s passion is in assisting destitute children and helping to create a bright future for them. Mr. Adu has business laced into his DNA. As an entrepreneur, he played a pivotal role in youth development in the country, mentoring several young people. Additionally, as a member of the Ghana Angel Investor Network (GAIN), Frank invested in many young entrepreneurs who had viable business ideas and would otherwise have limited access to equity financing.

He achieved these feats through the application of ruthless business logic which has inspired most of the positive outcomes of the bank. The measured risk taker and a firm believer in systems and procedures did not shy away from taking the tough decisions: Frank Adu’s biggest challenge however is in human resource. He believes the country is in dire need of people with principles, high moral values and unquestionable character. His weakness however is in his penchant for being forthright and candid and as he rightly puts it “I am not blessed with the gift of diplomacy”. Frank Adu is now 58 and is taking an early shower after more than 30 years of illustrious service to the banking Industry. Today he has become the fifth largest shareholder of the bank with nearly 3 percent shares.

The icing on the cake: Frank Adu Jnr. in 2018 won the prestigious African Banker of the Year at an award ceremony held at the Sandton Convention Centre, Johannesburg, South Africa and was also inducted into Africa’s CEOs Hall of Fame the same year for his sterling role in shaping the banking industry.

At an end of year thanksgiving service at Cal Bank’s head office in Accra, Mr. Adu Jnr shared fond memories of his stay in office with a team of workers he described as very youthful, dedicated and passionate. Henry Wadsworth Longfellow said, “Lives of great people remind us we can make our lives sublime and, departing, leave behind footprints in the sand of time.”

Mr. Adu who retired in 2019 after 30 years of service has indeed left behind a legacy which will long be remembered when he is no more. Frank Adu has also promised to reveal other intricate details of the 2008 debacle when he finally publishes his memoir.