HFC to raise GH¢ 50m to capitalise…as it posts impressive half year performance in 27yrs
The Managing Director of HFC Bank, Robert Le Hunte, has said the bank intends to raise some GH¢50 million through a rights issue by close of year, in a bid to meet the central bank's requirement of GH¢120 million capitalisation.
When successful, it will bring HFC's capitalisation to GH¢140million, above the minimum requirement, and strengthen its position in the market, particularly the mortgage sector, where it has long been a key player.
Mr. Le Hunt told the B&FT that shareholders ae expected to approve the move at an emergency General Assembly Meeting to be called soon.
"This new capital, together with the BBB+ S&P rating of Republic Bank Limited [HFC's largest shareholder], makes us one of the strongest in the industry and puts us in a better position to build on the strong foundation in the housing industry and the future prospects in the oil and gas industry," Mr. Le Hunte said.
Meanwhile, HFC Bank, which is a well-known mortgage lending house, is poised to show an improved financial performance by end of 2017, after posting a haft-year profit before tax of GH¢23.32 million
The performance, said to be the best in its 27 years of existence, comes after the bank posted losses and GH¢150 million in provision for impairment, in the last two years.
The profit after tax of GH¢22.75 million, according to the results, is 52 per cent higher than the GH¢14.28 million recorded at half year in 2016, as the bank will not be making any provisions for impairment, as it did in 2016.
The total assets of the bank also grew by 10.36% in the second quarter of 2017, from GH¢1.72 billion to almost GH¢1.9 billion.
Speaking to the B&FT during the release of the results, Robert Le Hunte said hard work of the Staff and the focus on recoveries over the past two years brought about the turnaround.
"The bank returning to profitability is through sheer hard work of the staff and the board to ensure that we turn our fortunes to become profitable."
Whilst admitting that the work was far from over, he said it was also clearly obvious that the bank was now in a better position than two years ago when Republic Financial Holdings Limited (RFHL) of Trinidad and Tobago took over control.
During the two-year period, to improve service delivery to customers, the bank spent over US$30 million on upgrading its Information Technology infrastructure and refurbishment of the branch network. In addition, investment was made in training and developing the staff with the assistance of RFHL, he said.
Mr. Le Hunte also stated with pride: "In spite of two consecutive years of losses, we were still able to remain active in our communities and actually increased our level of Corporate Social Responsibility (CSR)."
He intimated that his biggest achievement as the MD of the bank over the past two years was building a culture at HFC that will allow it to survive not only in the short term but in the long term.
HFC Bank became a member of the Republic Financial Holdings Limited in May, 2015, after a successful mandatory takeover.
The bank was recognised by the Institute of Human Resource Management Practitioners (IHRMP) as having the Most Successful Change Management Programme.
The bank was also adjudged the Most Telephone Efficient Bank in the Financial Institution survey conducted by Walsbridge Market Research, while it received the 2nd Runner-up Award in Corporate Social Responsibility and 1st Runner-up in Trade Finance at the 16th Ghana Banking Awards 2017.