HFC keyed for Banking Operations

Accra, Sept 17, GNA - Home Finance Company (HFC), Ghana's only home mortgage company, says it is keyed up to start banking operations before the end of the year.

Mrs Stephanie Baeta-Ansah, Managing Director of HFC, said this would be premised on the Bank of Ghana (BoG), issuing HFC a licence before November 1, 2003. Bank of Ghana has already approved HFC's application to operate a bank.

Mrs Baeta-Ansah announced this in Accra on Wednesday at the Facts-Behind-The Figures Series organized by the Ghana Stock Exchange. It is meant to give listed companies the opportunity to interact with the media, brokerage companies and officials of the Exchange.

Mrs Baeta-Ansah said the Bank to be known as HFC Bank would initially, "conduct business from the company's existing and new offices in Accra, Kumasi and later Tema," adding that, " preparations are underway to remodel all of our offices to suit banking operations." She said new branches would be opened in the major capitals in the future.

The home mortgage arm of the company, she noted would, however, remain a key business activity of HFC.

She said the decision to go into banking was based on the need to diversify the company's business in order to increase its profitability and growth, especially as banks also competed in the mortgage business. "In diversifying its operations into banking, HFC expects to provide its customers with broader-based financial products and services." HFC is going into banking in association with Union Bank of Nigeria (UBN), formerly Barclays Bank of Nigeria, which has purchased 20 per cent equity stake in HFC.

UBN is one of Nigeria's two largest banks with a wide network and a wholly owned subsidiary bank in London.

Mrs Baeta-Ansah said HFC had a technical agreement with UBN to guide the new HFC Bank, indicating that, " UBN will assist the bank by seconding staff to assist with commercial banking, inspectorate and staff training to upgrade the skills of a corps of about 100 predominantly Ghanaian staff..."

She expressed the hope that Ghana's B+ rating by Standard and Poor, an international rating agency, would to boost interest in HFC's corporate debt as well as equity instruments.

She said HFC share price has appreciated by 172.3 per cent. Competitive dividends have been paid annually since HFC's inception. Mr Asare Akuffo, Deputy Managing Director in charge of Finance and Banking put total income for HFC at 59.3 billion cedis for 2002 representing an increase of about three per cent over the figure for last year.

He said HFC expects to reduce the cost of funds further in the years ahead in line with the universal banking licence requirements. Profit after tax increased by 15.7 per cent to 8.8 billion cedis with earnings showing a growth averaging 30.3 per cent over the last five years.

Mr Akuffo said earnings per share had also increased steadily over the period with a reduction of earnings per share to 140 cedis in 2002.

"This was due to the rights issue of 22.6 million additional shares in November last year." 17 Sept. 03