HFC Bank fails to pay dividend for 2016 year ending

HFC Bank fails to pay dividend for 2016 year ending

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By Cecil MENSAH

The management of HFC Bank Ghana Limited, a subsidiary of Republic Bank group of Trinidad and Tobago, has failed to pay dividend to shareholders for the year ending 2016.

According to the bank, it made a loss as a result of injecting massive funds in building its data base (Information, Communication and Technology) and further training staff to meet the changing demands of the customer.

The bank says the decision to commit the funds into building the capacity of staff was geared towards equipping staff to better serve customers.

The bank in the year 2015 also wrote off loans totaling GHC56.07 million as Non-Performing Loans (NPL) and the bank’s cumulative provision now stands at GHC140.56 million as of December 2016.

The amount represents an aggregate 60.91 percent of the Non-Performing Loan portfolio.

However, the board chairman and representative of Social Security and National Insurance Trust (SSNIT), Prof Joshua Alabi, has resigned his position for Mr. Charles William Zwennes, a legal practitioner to take over as the new board chairman of the bank.

Even though the bank failed to pay dividend, shareholders did not protest. They have also re-elected the directors unto the management of the bank.

Mr. Robert Lennard Le Hunte, Managing Director (MD), Mr. David Dulal-Whiteway, Mr Nigel Mark Baptiste, all representing Republic Bank Group, Rebecca Atswei Lomo, representing SSNIT, Ebenezer Tetteh Tagoe and Paul King Aryene were elected as directors onto the board.

These changes occurred at the Annual General Meeting (AGM) of the bank held in Accra last Thursday.

Giving the chairman’s review of the performance of the bank, Mr. Charles William Zwennes said the year 2016 marked another difficult year for the global economy characterized by stalling global trade, weak investment and policy uncertainty.

“Global growth was estimated at 2.3 percent, according to the World Bank. Advanced economies struggled with subdued growth and low inflation and are estimated to have slowed to 1.6 percent in 2016 from 2.1 percent in the previous year due to Brexit and a weaker than expected growth in the United States of America,” he said.

In spite of these, the bank and its subsidiaries recorded an 18 percent rise in assets from GHC1.6 billion to GHC1.89 billion.

Deposits also increased by 31 percent, outperforming the industry average of 25 percent, representing a strong balance sheet, he said.

Robert Lennard Le Hunte, MD of the bank, said although the bank’s 2016 financial results were not as expected, the bank’s liquidity risk was kept under control and the bank was able to meet on timely basis its financial obligations as they fell due.

He maintained that deposits during the last twelve months amounted to GHC1,558.2 million in December 2016 compared to GHC 1,189.5 million in December 2015, representing a growth of 31 percent.

According to him, the increase in deposits was mainly driven by the bank’s branch network deposit portfolio growth.

cecilm@businessdayghana.com

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