HFC Bank Limited has been able to achieve most of its annual targets for the year ending December 31st, 2014, in spite of the adverse macro-economic conditions that greatly impacted the banking sector.
The macro-economic challenges included the sharp depreciation of the cedi against major international currencies and keen competition in the banking sector, which saw two new entrants Fist Capital Plus and GN Bank.
According to the bank’s outgoing Managing Director, Mr. Asare Akuffo, in his report, total assets in the banking sector grew by 42.2 per cent to GH¢ 51.4 billion at the end of December 2014 compared with a growth of 32.8 per cent the previous year.
After-tax earnings of the HFC Group- the HFC Bank and its subsidiaries- grew by 46 per cent to GH¢57.5 million for the 2014 financial year, reflecting a GH¢77.2 million increase in operating income, while expenses went up by 69 per cent to 113.7 million.
The Group’s net income ratio declined slightly from 67 per cent to 66 per cent due to tighter deposit spreads.
He said management, however, put in measures including periodic re-pricing initiatives to improve margins. On the other hand cost-income ratio for the year under review increased to 57.1 per cent from 53 per cent in 2013, a reflection of the high cost operating environment.
“Total assets grew by 35 per cent to close at GH¢1.34 billion from the previous figure of GH¢999 million. Loans and advances to customers, including home loans, went up by 25 per cent to reach GH¢642.8 million. Gross non-performing loan (NPL) rate deteriorated slightly from 9.3 per cent to 10.4 per cent in 2014,” he stated.
Mr. Akuffo said the bank opened a new branch in the Kumasi metropolis in the year under review, bringing the total number of branches nationwide to 40, with 43 on-site and off-site ATMs.
HFC’s home loan portfolio stood at GH¢173.6 million at the end of the year representing 25 per cent of the bank’s total loan book.
Total disbursements for the year was GH¢26.48 million for 216 customers, out of which foreign currency loans was $5.64 million while cedi loans amounted to GH¢8.012 million. Consumer loans portfolio at year end was at GH¢15.724 million compared to GH¢ 8.8 million at the beginning of the year.
The bank’s subsidiaries also posted significant contributions to its performance.
HFC Investment Services Limited’s assets under management rose by 50 per cent from 168.2 million to 251.6 million. The number of clients was 32,171 compared to 29,403 at the end of 2013. Its contribution to the group’s earnings rose by eight per cent to GH¢2.36 million.
HFC Realty, as a result of the exchange rate volatility and introduction of VAT on residential properties, made a moderate profit of GH¢301,186, while HFC Boafo Microfinance improved its performance by three per cent to GH¢972,475, with a loan portfolio of GH¢24 million. Deposits mobilised for the bank under the period increased by 63 per cent to GH¢34.5 million.