Robert Le Hunte
After making significant losses for two consecutive years, HFC Bank Ghana Limited says it is now back onto the path of profitability.
Managing Director of HFC Bank Ghana Limited, Robert Le Hunte, made this known to the media on Thursday in Accra when the bank released its mid-year results for 2017 which is considered the best in its 27-year history.
It would be recalled that HFC Bank posted a loss of GH¢36.3million in 2015 as a result of a sharp rise in impairment charges from GH¢14.2 million to GH¢81.8 million, representing 476 percent.
During the same period, the bank undertook a critical review of its loan portfolio and the exercise resulted in a 195 percent increase in impaired loans from GH¢41.9 million in 2014 to GH¢123.8 million in 2015, which represented about 58 percent of the NPL portfolio at GH¢213.8 million.
Also, investments in government securities dipped by 39 percent from GH¢288 million to GH¢174 million, which was attributed to redemption of some investments in the securities to buffer the liquidity position, as well as support net loans and advances which increased by 36 percent during the year.
The group’s total equity declined by 21 percent from GH¢248 million to GH¢195 million, and this was mostly driven by decline in the income surplus account and regulatory credit risk reserve.
But Mr. Le Hunte said the tide has changed for the better at HFC Bank and that it was now back onto the path of making profit for its shareholders.
According to him, the bank now boasts of having one of the highest cover ratio i.e. provision to non-performing loans of over 65 percent, which provides the bank with protection against future shocks going forward.
He attributed the latest success of the bank to the hard work of its staff and the focus on recoveries from its gloomy days over the last two years.
The MD observed that it was clearly obvious that HFC was now in a better position than it was two years ago when Republic Financial Holdings Limited (RFHL) took over.
Improved Service
Over the last two years, BUSINESS GUIDE gathered that HFC Bank has spent an amount of $30 million on upgrading its network’s Information Technology (IT) infrastructure and refurbishment.
In addition, the paper learnt that the bank made significant investment in training and developing its over 1,000 staff nationwide with the assistance of RFHL.
The MD reported that in spite of two consecutive years of losses, the bank was still able to remain active in the communities and enhanced the Corporate Social Responsibility (CSR).
Capital Increment
Meanwhile, Mr. Le Hunte disclosed that at the bank’s recently concluded board meeting, approval was given by the board to approach shareholders of the bank to consider the possibility of increasing the bank’s capital by an amount of $ 50 million.
The move would allow the bank to further expand its operations to other sectors such as oil and gas other than its core mandate of mortgage financing.
About HFC Bank
HFC Bank Ghana Limited is a universal banking institution operating in the country.
The subsidiary offers retail banking, commercial banking, investment banking, mortgage banking and microfinance.
By Melvin Tarlue