HFC Bank records mixed financial results in 2016

HFC Bank recorded an 18% growth in its assets from GH¢1.6 billion to GH¢1.89 billion in the 2016 financial year.

The Bank also saw its deposits going up 31%, outperforming the industry average of 25%, from GH¢1.19 billion to GH¢1.56 billion.

However, in the same year under review, HFC Bank and its subsidiaries recorded a widening loss after tax and non-controlling interest ofGH¢47.73 million as against a GH¢36 million loss it recorded in 2015.

These results were made known by the Bank’s new Board Chairman, Charles William Zwennes at the Bank’s 2016 Annual General Meeting held in Accra.
According to Mr Zwennes, the loss position was driven by one-off expenses; changes in mortgage Non-Performing Loan (NPL) Policy; and Bulk Oil Distributors (BDCs) Portfolio.

“The liquidity position of the Bank was considered adequate for normal banking operations for the review period. Management in line with the Bank’s risk strategy adopted effective liquidity risk practices and kept a prudent level of liquidity,” he said.

Additionally, HFC Bank ended 2016 with a Capital Adequacy Ratio (CAR) of 11.50%, above the regulatory minimum level of 10%.

“The suspension of interest on the non-performing loan portfolio and the current provisioning levels continues to adversely affect our CAR,” MrZwennes explained.

He noted that this negatively affected HFC’s single obligor limit, ability to increase its risk assets, and by extension its loan portfolio.

Mr Zwennes said the Board of Directors of HFC Bank has given serious consideration to the options available to increase the Bank’s capital to attain a minimum CAR of 13% in the interim.

On dividends, the Board Chairman announced that the Board of Directors have recommended “no-dividend payment as a result of the loss recorded for the year until such a time when we can fully cover dividend payments from profit after tax.”

The Board Chairman was, however, optimistic of HFC Bank’s performance in 2017.

“Our performance outlook for our banking enterprise in 2017 remains positive as we continue to focus on building a solid balance sheet, controlling costs, improving recovery efforts and streamlining systems and procedures,” he affirmed.