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HFC Bank of Ghana Says Profit Increased 26% in 2011

March 14 (Bloomberg) -- HFC Bank Ghana Ltd., a lender in the West African nation that focuses on mortgages, said profit increased last year as net interest income rose 21 percent.

Net income advanced 26 percent to 10.9 million cedis ($6.3 million) in the year through December, the bank said in a statement e-mailed by the Ghana Stock Exchange in Accra today. Net interest income increased to 39.7 million cedis, it said.

“The bank smartly reduced interest expense,” Derrick Mensah, a research analyst at SIC Financial Services Ltd. in Accra, said by phone today. “It gave out more loans while it reduced investments in government securities.”

HFC’s interest expenses during the year reduced by 11 percent to 19.3 million cedis. Loans and advances to customers grew 15 percent to 206.4 million cedis while investment in government securities declined by 7.9 percent to 70 million cedis.

The lender’s shares were unchanged at 45 pesewas by the close in Accra.

“We should expect to see activity in the shares, now that the bank has indicated it will hold a rights issue in order to meet the central bank’s 60 million cedis minimum capital requirement by December,” Mensah said.

HFC, which has a stated capital of 45 million cedis, will ask shareholders to approve the plan at its annual meeting on April 26, Akwete Akita, executive director said on March 9.

To contact the reporter on this story: Moses Mozart Dzawu in Accra at mdzawu@bloomberg.net

To contact the editor responsible for this story: Emily Bowers at ebowers1@bloomberg.net

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