Pluralism does not mean competition- Akuffo

Accra, Aug. 24, GNA - Mr. Asare Akuffo, Managing Director of HFC Bank on Friday said the increase in the number of banks did not necessarily mean competition and that pricing in terms of reduced lending rates was due more to macroeconomic and financial regulatory changes.

He said, "there is no evidence that new entrants into the banking industry in Ghana have made any significant change, especially regarding pricing. Mr. Akuffo however, agreed that some of the new banks had influenced swift change in the art of customer service and marketing.

Mr. Akuffo who was interacting with members of the Institute of Financial and Economic Journalists (IFEJ) in Accra, on the impact of influx of foreign banks said in a competitive banking industry, it was necessary to ensure that banks were effective forces for financial intermediation.

Quoting an International Monetary Fund (IMF) study of the Banking industry in Ghana, Mr. Akuffo said it was clear that Ghana's banking structure was slightly less competitive to that of Nigeria and Kenya.

He added that, Nigeria had a huge economy and it was understandable, "but as the economy of Ghana grows at a faster pace, private Foreign Direct Investment facilitated by Nigerian Banks may play a key role in Ghana, if well directed."

Speaking specifically on the influx of foreign banks onto the Ghanaian industry, Mr Akuffo said some Nigerian banks were actually no banks at all and obviously had to be shut down.

He said the introduction of universal banking operations added tremendous benefits to the banks' operating income and profit margins. Outlining the un-audited half-year statement ending June 30, 2007, Mr. Akuffo said the HFC Bank Group put up a sterling performance with a profit after tax of 18,596 billion cedis compared to the 7,207 billion cedis posted last year.

The bank made a net interest income of 51.6 billion cedis, but the net interest income for the Group's operations dropped sharply to 52.1 billion cedis. Operating income for the Group was 68.7 billion cedis, while the Bank's closed at a respectable 63.8 billion cedis. 24 Aug. 07