Republic Bank to invest US$100m in HFC to become third largest bank
The new parent company of HFC Bank, the Republic Bank of Trinidad and Tobago, plans to invest between US$100 and US$120 million in the local bank to move its performance and value among the top three banks in the country.
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Already, the bank has spend US$75 million on acquiring 57.11 per cent shares in the Ghanaian bank which has specialisation in mortgage financing, corporate and retail banking.
The capital injection would go into realigning the local bank’s systems into that of its new parent bank, upgrading staff capacity and introducing a new
culture of banking, which should combine to lift HFC Bank into the top three banks in Ghana in three years.
“We will continue with what has been started and we are committed move HFC Bank to a new height. We will put in the required capital and investment necessary to make the bank a top tier business among the first three banks in the country,” the acting Managing Director of the bank, Mr Robert Le Hunte told the GRAPHIC BUSINESS.
HFC Bank now has 40 branches in seven regions and about ninth bank with the largest spread.
According to a recent banking survey by the GRAPHIC BUSINESS, HFC Bank placed 16th with 2.65 per cent share of industry assets; 19th bank controlling 1.93 per cent of the share of industry deposits and with 2.34 per cent share of industry loans and advances, captured the 18th position.
With an asset base valued at GH¢1.34 billion and profit after tax of GH¢57.89 million to occupy 13th position in the industry and stated capital of GH¢95.4 million places HFC Bank in the third quartile category.
This means the bank’s new owners would need to do a lot of catching up and investments should its strategy of ‘Being Three in Three’ – that is to be among the top three banks in the country in three years – become a reality.
Republic Bank is one of the largest independent commercial banks in English-speaking Caribbean and has been trading for over 176 years. As of September last year, the Caribbean bank which also has mastery in mortgage financing and retail banking, had assets valued at US$9.4 billion.
By his estimation based on their experiences with other acquisitions, Mr Le Hunte believes investments to the tune of US$120 million should enable the bank to move up the ladder, expand its operational activities as well as visibility.
He said Republic Bank now plans to introduce new services and products into the local bank and making it more capable of meeting the needs of the customer, saying “we have a vision of improving HFC’s competitive advantage in this market, to bring greater values to the customers in Ghana.”
Capacity building and product development
Republic Bank hopes to draw on its own mortgage financing expertise and retool HFC’s mortgage financing capabilities and improve it to another level.
This will come at the back of capacity building investments to enable the bank service customers better, as well as create opportunities for our staff.
“There will be training, knowledge transfers to enhance the competitiveness of the bank. Over the next month, Republic bank and HFC Bank will be working on realigning our systems and procedures to harmonise operations.
West Africa strategy
The investments and focus on the local subsidiary is strategic to Republic Bank as it would help it pursue its sub-saharan expansion agenda.
“HFC will be the focal point and planned expansion for Republic Bank into other parts of Africa,” the acting managing director said.
Mr le Hunte said the bank was happy to see through the Mandatory Takeover Offer (MTO) which was now part of the bank’s history and was was committed to taking HFC Bank to the next level. – GB