Oil & gas financing on HFC's agenda

HFC Bank says it will be looking at financing the oil and gas industry, especially the down- and mid-stream sectors, this year.

With the bank’s new partner, Republic Bank of Trinidad, the largest financial institution in the Caribbean region with extensive experience in financing oil and gas, HFC says the experience they bring on board will help them finance the burgeoning industry in Ghana.

“Trinidad and Tobago is an oil-producing country, and therefore the experience that Republic Bank of Trinidad -- with 8 percent stake in HFC -- has in financing the oil and gas industry will help us, since we are looking at venturing into that sector. It is a partnership that we are expecting to bring additional leverage to us,” said Asare Akuffo, HFC Managing Director.

“It is likely to start from the down-stream to mid-stream area. I think that is where funding is usually focused."

Ghana’s oil industry kicked off in December 2010, and production from the Jubilee Field is currently around 110,000 barrels per day. Initial estimates put the potential value of mid-stream and down-stream business at US$5billion as the industry expands through new field production.

Mr. Akuffo said HFC will also continue its financing of the SME sector as it positions itself to be the leading retail and SME-focused financial institution in the country.

“I can tell you the growth in lending to SMEs is more than that of any other bank. Our portfolio stands at 80 percent whereas the entire industry lending to SMEs stands at 44 percent. We are therefore providing our staff with training and orientation to efficiently service the financial needs of the large SME market in Ghana," he said.

The bank will participate in financing infrastructural and residential real-estate projects and strengthen its presence in the cocoa industry.

“Our subsidiaries will continue to grow their business significantly. The new three-tier pension scheme and the demand for affordable housing provide opportunities for the growth of HFC Investment Services and HFC Realty," he said.

“HFC Boafo plans to grow its loan book actively this year. We shall also seek opportunities for some of the subsidiaries to grow through mergers and acquisitions."

He noted that the effective implementation of the bank’s strategic plans over the years has gradually created a valuable brand that shareholders should be proud of.

“There are indications that our earnings will improve significantly in the months ahead," he said.

“The bank will continue to maintain its quality growth-stance in the market to ensure that asset and earnings growth remain steady and sustainable.”