While the bank has written off a cumulative GH¢140.55 million (represents 60.91 per cent of the non-performing loans portfolio) as of December 2016, it has also invested enormous sums in upgrading its information technology platform, building capacity of staff and sales force, refurbishing branches and opening a few more to give the bank a new lease on life.

  “The 2016 financial results were characterised by another year of heavy provisioning and capital expenditure spent on stabilisation of the bank’s technology infrastructure, as well as refurbishment of branches to make them more user and customer-friendly. We expect that the levels of provision in 2015 and 2016 will not reoccur in 2017.”

“We, however, expect the full benefit of the capital expenditure made in both technology infrastructure and branch refurbishment this year,” the Managing Director of the bank, Mr Robert Le Hunte, said at the annual general meeting of the bank in Accra last Thursday.

 Consolidated financial position

The HFC group recorded an overall net interest income of GH¢131.19 million, down from the GH¢143 million recorded in 2015, having waived interest on loans totalling GH¢230.75 million for last year.

The bank’s net loans and advances to customers, according to the managing director, decreased negligibly from GH¢924.74 million in 2015 to GH¢919.96 million at the close of last year as against 133 per cent growth in its investments in government treasuries from GH¢174.91 million to GH¢407.89 million.

This came at the back of 31 per cent growth in deposits to GH¢1.56 billion, compared to the GH¢1.19 billion recorded in December 2015.

Although the bank’s operating expense increased by 20 per cent to GH¢192.60 million, the swelling has been attributed to projects it undertook to clean the books of legacy issues, as well as investments in branch refurbishment and a deposit campaign.

It also included a one-off expenditure of GH¢20.49 million towards paying off workers who opted to leave the bank (Voluntary Separation Package).

“Normalised operating expenses (after adjusting for one-off expenses) for 2016 should be GH¢172.11 million compared to GH¢159.94 million in 2015. The bank was, therefore, very prudent in the management of cost as adjusted operating expenses went up by eight per cent compared to an average inflation rate of 17.5 per cent for the year 2016,” Mr Le Hunte stated.

He expressed the hope that as the bank continued its journey to restructure the HFC Bank Group in all areas, “we are confident that these are the right decisions to take and they will serve us in good stead in the very near future.”

 Chairman’s report

In his report, the Chairman of the Board of Directors of the bank, Mr Charles William Zwennes, said the bank and its subsidiaries recorded an 18 per cent rise in assets from GH¢1.6 billion to GH¢1.89 billion during the period under review.

Mr Zwennes, appointed as Chairman on April 26, 2017 following the resignation of the former chairman, Professor Joshua Alabi, said the 31 per cent deposits increase was above the industry average of 25 per cent.

The chairman said the widening loss (after tax and non-controlling interest) of GH¢47.73 million (up from GH¢39.24 million) was mainly driven by the one-off expenses, changes in mortgage non-performing loan (NPL) policy and the indebtedness of Bulk Oil Distributors (BDCs).

He was, however, bullish about the bank’s capital adequacy ratio of 11.5 per cent, above the regulator’s 10 per cent minimum threshold, as well as the outlook which he said “remains positive as we continue to focus on building a solid balance sheet, controlling costs, improving recovery efforts and streamlining systems and procedures”.

 About the new chairman

Mr Zwennes, who has been a member of the Board of Directors of HFC Bank since April 2015, brings on board rich experience as a corporate attorney of many years of practice.

Prior to joining his current law firm, Gaisie Zwennes Hughes & Co, the successful solicitor and barrister of the Superior Courts of Ghana worked at the Chambers of Christian Bevington, QC London and Messrs Fooks Chadwick, Solicitors, London.

Mr Zwennes holds an LLB from the University of Kent, United Kingdom (UK), and an LLM in Corporate & Commercial Law from the University of London, UK.

He also holds a Certificate in Structuring, Negotiating and Documenting of Oil & Gas Transactions from the Centre for Energy & Mineral Policy Law (CEMPL), University of Dundee, Scotland.