HFC Bank Captures SME Sector

HFC Bank Ghana, one of the leading banks in the country, has stated that despite the attention given to the Small and Medium-scale Enterprise (SME) sector by most banks, it has excelled in growing the sector.

The Managing Director of the Bank, Asare Akuffo added that what most banks seek to offer SMEs is not enough to sustain their businesses.

He said, “Ours is mostly an SME economy and we have lived it. Since our inception into banking in 2003, all the companies we have dealt with are SMEs and those that we can grow with are SMEs, and that has been our main focus.”

He added that “the difference, we bring is that considering the structure of our funding, we are able to support the sector with some long-term funding so they can do a lot of expansion.”

“I know businesses that have been around for sometime but immediately they joined HFC they became wealthy because with us they can plan for the long-term.”

Mr. Akuffo was addressing the media at the “Facts Behind the Figures” programme organized by the Ghana Stock Exchange.

He noted that the bank’s stance on quality growth in both Assets and Liabilities impacted positively on the overall performance for the year ending 2011, adding that the total assets of the Group increased by 19.4 percent to GHS 435.3 million.

Customer deposits on the other hand increased by 47.1 percent to GHS 230.3 million.

He said total business loans of the Bank registered a growth rate of 15.98 percent in 2011 from GHS 120.71 million to GHS 140 million.

Its mortgage portfolio grew by 22.95 percent to GHS 70.76 million in 2011 from GHS 57.55 million in 2010 on account of the Public Sector Workers Housing Scheme.

Mr. Akuffo indicated that “the plan to re-organize the Bank into a holding company with four major subsidiaries for Banking, Investment Management, Private Equity and Real Estate is yet to receive regulatory approval.

“Although delayed, we are confident that this approval will be obtained soon because the proposed structure is not new to the Ghanaian banking industry and it seeks to streamline our operations and to strategically position it to take advantage of new business opportunities.”

He added that internal restructuring of the posture of the bank’s branches to make them more marketing-oriented commenced in the last quarter of the year and it is to be completed in the first half of 2012.

According to the MD, the bank will complete the second phase of its capital raising exercise to meet the new regulatory minimum capital requirement within the first half of 2012.

This, he stated, should increase the bank’s stakeholders’ funds to about GHS100 million.

“The higher level of capital will enable us apply our skills in servicing SME businesses to grow our loan portfolio and also participate in syndications leading to the financing of oil and gas, infrastructure and residential real estate projects,” he indicated.