HFC Bank has projected to meet the new GHC400 million minimum capital announced by the Bank of Ghana (BOG) before the deadline of December, 2018.

According to the HFC Managing Director, Anthony Jordan, HFC can meet the GHC400 million as set by BOG but is ready to meet the new capital requirement by April 2018.

Responding to whether HFC will meet the new capital, the Managing Director Mr. Jordan said, HFC Bank will meet the new minimum capital requirement.

“We intend to meet this new threshold long before the deadline in December 2018. There are strategic reasons why we will meet the deadline. Based on the discussions I have had with our majority shareholder the Republic Bank, we have decided to reinject the additional capital to meet the requirement of GHC400 million just after our next Annual General Meeting which is set to take place in April 2018.”

2017 half year Financial Performance

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 half-year profit before tax of GHC23.32 million

The profit after tax of GHC22.75 million, according to the results, is 52 per cent higher than the GHC14.28 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 GHC1.72 billion to almost GHC1.9 billion.

BoG’s announcement

The central bank recently announced a new capital requirement of GHC400 million for banks in the country.

The increase meant that, new entrants into the banking industry have to cough the GHC400 million amount while existing banks were given up to December 2018 to meet the new minimum capital requirement.

The GHC400 million represented a jump of 233.3 percent from the previous GHC120 million set by the regulator for commercial banks in the country.

Responding to whether HFC will meet the new capital, the Managing Director Mr. Jordan said, HFC Bank will meet the new minimum capital requirement.

“We intend to meet this new threshold long before the deadline in December 2018. There are strategic reasons why we will meet the deadline. Based on the discussions I have had with our majority shareholder the Republic Bank, we have decided to reinject the additional capital to meet the requirement of GHC400 million just after our next Annual General Meeting which is set to take place in April 2018.”

New requirement not too high

That notwithstanding, he downplayed calls by some other stakeholders within the financial industry for the central bank to take a second look at the increase which they deemed to be too high.

Mr. Jordan stated that: “I will not say the amount set by the regulator is too much. One has to look at it from the context of the problems and the losses some banks have run into in times past. We must look at capital requirement as a buffer, which is able to help the banks to stay in business if there are shocks within the industry.

The other thing is that the government has made it quite clear of undergoing economic transformation. They say it will come along with some big-ticket transactions which they want it to be private sector led. This means they need banks that have the muscle and financial backing to take on these transactions to help transform the Ghanaian economy,” he added.