Shareholders of HFC Bank have raised concerns about the proposed takeover of the bank by one of the biggest financial institution in the Caribbean, Republic Bank.
The concerns, which bordered on their fate as shareholders and the continued existence of the bank after the takeover, dominated discussions at the bank’s Annual General Meeting in Accra on April 24.
One after the other, the shareholders took turns to voice their concerns as to the future of one of the country’s indigenous banks which was noted as being the pioneer of the housing mortgage programme.
A shareholder, Mr Daniel Ntim, told the GRAPHIC BUSINESS after the meeting that he was at a loss as to what was happening, considering the news making round in the media and the inability of the bank to come clear on the issue.
“I heard the news last week that Republic Bank wanted to increase its stake in HFC bank and wanted to make an offer to shareholders to buy their shares, but three days later Mr Asare Akuffo (Managing Director of HFC Bank) said he did not have any knowledge about it,” he said.
The move, according to him, was not a good one considering the dominance of foreign banks in the country, stressing that the motive of Republic Bank was not clear as to whether it was a complete buyout of shares from shareholders or not.
“I think the indigenous nature of the bank should be maintained. We have too many foreign banks especially Nigerian banks. We need to encourage more Ghanaians to buy shares rather than giving it out to foreigners,” he said.
His concerns about the fate of Ghanaian banks in the country vindicates the cry of other indigenous banks about what they see to be a grand modus operandi by industry regulators to create an environment where only foreign banks can play.
Another shareholder, Mr Samuel Dadzie, did not mince words in expressing his displeasure about the situation, adding that in 2012, Republic Bank’s shareholding in HFC was 8.79 per cent; increased to 40 per cent; a situation which made it an associate undertaking to Republic Bank.
“I am really confused about the whole takeover. Especially on one of the radio stations, it was reported that the MD himself was not comfortable with the way things were being handled, on the takeover itself,” he alleged.
According to him, “this issue is mind-boggling and for now I suggest that 40 per cent stake in the bank should be enough, and not to make HFC a subsidiary.”
Mr J K Annan, another shareholder, wanted the board of the bank to come clear on the issue and to tell shareholders if HFC was going to be in existence after September 2014 considering that Republic Bank had exceeded the 30 per cent threshold to buyout other shareholders.
“Mr Chairman, is HFC going to exist after September? he asked with a stern face, adding that: “Looking at the releases coming from the Ghana Stock Exchange (GSE), by September, something will happen and shareholders must know what is happening now,” he said.
MD Responds
Later in an interview with the media, the Managing Director of HFC Bank, Mr Asare Akuffo, reiterated what he said in response to some concerns of the shareholders that the bank would be issuing an official statement on the issue soon, urging all to remain calm to see whether decisions taken would be in the interest of shareholders.
“As I said, the board will be issuing an official statement after taking advice from our lawyers so kindly give us a few days. That statement will come out and it will explain everything,” he said.
According to him, there was no problem as the bank’s business was going on as normal, adding that: “we have made a decision as a board.
The company belongs to shareholders so they take final decisions in these matters but the board’s decision as we speak is that we keep the bank’s majority shares under Ghanaian control. It is for the shareholders to decide.”
Asked whether the issue of takeover should be downplayed, the HFC Bank MD said, “I can’t tell. There has been a release and it is in the hands of GSE and the Securities and Exchange Commission (SEC), so you can ask for more information from them. I am not supposed to express views on that.”
Financial performance
The bank posted a profit of GHC39.8 million, compared to GHC15 million recorded in 2012.
Total assets of the bank reached GH₵ 999 million up from GHC595 million in 2012, showing an increase of 68 per cent.
Customer deposits increased by 45 per cent from GHC312 million in 2012 to GH₵454 million in 2013.
The bank is paying a dividend of GHC0.035 per share to its shareholders for the 2013 financial year.