Business News of 2014-04-28

HFC to leverage association with Republic Bank

HFC Bank is to take advantage of the 177 years of experience of its largest shareholder, Republic Bank, to create additional value for its clients, the Board Chairman of the bank, Nana Agyei Duku, has said.

Republic Bank, which became the largest single shareholder in HFC Bank last year, with a 40 per cent stake, following the exit of the Union Bank of Nigeria, signalled last week that it would increase its shareholding in the premier mortgage financing HFC Bank.

Nana Duku told shareholders at the bank’s Annual General Meeting (AGM) in Accra that Aureos Africa Fund also sold its interest to Republic Bank, contributing to it becoming the largest shareholder.

Despite the changes in the shareholding structure of the bank in 2013, Nana Duku said the bank made some modest gains.

Operating income rose by 79 per cent to GH¢127.8 million in 2013 from GH¢71.3 million in 2012, while profit before tax also increased by 176.6 per cent to GH¢52.1million, up from GH¢18.8million in 2012.

Nana Duku also announced that the bank would be paying GH¢0.035 per share to its shareholders as dividend for the 2013 financial year.

The Managing Director of the bank, Mr Asare Akuffo, said the bank continued with its good performance in 2013, growing total assets by 68 per cent to GH¢999 million, up from GH¢595 million in 2012.

Customer deposits also increased by 45 per cent from GH¢312 million in 2012 to GH¢454 million in 2013.

Mr Akuffo added that the bank opened two new branches in 2013, increasing its branch network to 33 with 37 automated teller machines (ATMs).

Also, loans granted to Small and Medium Enterprises and other corporate clients increased by 68 per cent to GH¢413.1 million.

The bank’s home loan portfolio stood at GH¢115.4 million as of the end of 2013, with disbursements for the year amounting to GH¢19.39 million for 236 loans.

On the performance of the bank’s subsidiaries, Mr Akuffo told shareholders that HFC Investment Services Limited increased its assets under management by 75 per cent from GH¢95.8 million to GH¢168.2 million, but HFC Realty made a marginal loss GH¢0.040 million due to unexpected delays in delivery of housing units from its projects.

“These projects would deliver significant number of houses in 2014 to improve HFC Realty’s profit performance,” the managing director explained.

Its micro lending subsidiary, HFC Boafo Microfinance, also improved its 2013 profit performance by 29.8 per cent to GH¢0.923 million, with a loan portfolio standing at GH¢13.7 million in 2012.


According to Mr Akuffo, despite the economic uncertainties, the bank was taking appropriate measures to ensure that customers and the bank’s business were not adversely affected.

“US dollar mortgages portfolio will continue to grow as projected since non-resident Ghanaians represent over 90 per cent of our market,” he said.

He also announced that the special housing schemes started by HFC Realty in 2013 would be completed in 2014 to enable the bank expand its mortgage portfolio.

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