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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, Dr Asare Akuffo, in his report said 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.

Dr 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 year end, 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 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.

HFC Capital Partners Limited, the Group’s latest subsidiary currently managing the 40 million cedis HFC Venture Capital Fund is projected to yield superior returns to the bank within the medium to long term as ‘a little over 22 million cedis has been committed to three investee companies in the real estate, hospitality and manufacturing sectors of the economy.

Dr Akuffo said the bank in 2015, would continue to maintain its quality growth stance in the market, focusing on effectively managing risk, creating quality assets, maintaining strong capital liquidity and effective cost control.

“The banking industry with its 28 players remains very competitive. We will therefore periodically review our strategy and posture to ensure that we are ahead of the competition,” he stated.

He said: “…your bank has made strides in terms of business growth and profitability. I wish to assure you that the bank is well positioned and ready to take advantage of new opportunities in the market, and to continue its strong growth.”

Mrs Muriel Susan Edusei, outgoing Board Chairperson of the bank, announced that members have recommended payment of a dividend of GH¢ 0.060 per share to its shareholders, representing an increase of 71 per cent in the previous year’s dividend of GH¢ 0.035 per share. This, she said, was in line with its objective of continuously delivering value to its shareholders.

She noted that the bank emerged as overall best performing stock on the Ghana Stock Exchange during the year under review with the stock price recording 56.25 per cent capital gain in 2014 rising from 96 Ghana pesewas at the beginning of the year to GH¢1.50 at the end of December 2014.

“We are optimistic that we can build on our success despite the expected challenging domestic and global economic environment. This optimism is premised on the strength and resilience of our business model and our committed staff,” she stated.