Mr Asare Akuffo, MD of HFC Bank

The Home Finance Company (HFC) Bank (Ghana) Limited has adopted a modest and cautious outlook on business for the current financial year.

Articulating the position, the Chairman of the Bank’s board of directors, Nana Agyei Duku, said following the global economic crisis that hit few years ago risks still prevail in economy external to Ghana.

He added that in spite of the macro-economic stability achieved on the domestic front over the last several years, certain policies of national administration and internal circumstances coupled with the external risks could have a negative effect on the economy if we throw caution to the winds.

According to Nana Duku, possible risk from external sources is that we could catch the contagion of the debt crises in some Eurozone countries, such as Greece, Spain and Italy.

Turning his attention to the domestic front, he referred to the fall of the cedi, especially against the dollar, as a possible risk that could destabilise the macro-economic environment.

By implication, Nana Duku pointed out, that the migration of public workers onto the single-Spine Salary Scheme (SSSS) and a recent increase in the minimum wage could increase government expenditure and raise inflation.

“Besides 2012 is an election year and [it has] its usual fiscal challenges” in the form of higher state expenditure, which could also fuel inflation, he added.

All is however not gloomy, he said adding: “We prospect that national administration will keep its pledge of increased spending on infrastructure.  [And it is our hope that that] coupled with increased revenues from [crude] oil exports and increased domestic resource mobilisation” will have a positive impact on the banking industry.

He then assured shareholders that HFC Bank has diverse business sectors and will thus “remain focused on its Strategic objectives to deliver higher returns.”

Earlier in his statement, Nana Duku pointed out that the negative global effects of the Eurozone debt crises have prevailed through 2011 causing even the International Monetary Fund (IMF) to reduce its expectation of growth in the global economy for 2012 from 4.0% to 3.3%.

On the domestic front, the chairman of the HFC Bank’s board of directors recalled, inflation remained in the single digit throughout 2011 and closed the year 0.4% lower that the projected 9%, adding that, by the Composite Index of Economic Activity (CIEA) of the Bank of Ghana level of economic activity grew by 3.1%.

He however disclosed that Ghana had a lower balance of payment surplus in 2011 (US$546.5 million) than in 2010 (US$1.5 billion.)

While in 2011 Ghana exported US$4.9 billion in gold, US$2 billion in cocoa, and US$2.7 billion in crude oil, we imported US$3.3 billion in crude oil products compared to US$2.2 billion in 2010, he added.

In 2010, the cedi depreciated against the dollar by 3.1%, but in 2011, the depreciation was 4.9%.

He announced that there were remarkable improvements in banking, and disclosed that in 2011, bank deposits grew by 35.3% to GH¢16 billion; in 2010 it went up by 31.7%.

Total assets of the banking industry also grew by 26.8%, up from GH¢17.4 billion in 2010 to GH¢22.6% in 2011, he said.


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