HFC BANK (GHANA) LIMITED FACTS BEHIND THE FIGURES (YEAR END 2011) 3 rd May, 2012

HIHGLIGHTS OF OUR PERFORMANCE

GROWTH STRATEGY The Bank’s business continued to be more ‘Liability driven’ rather than ‘Asset driven’ in The posture required growth in Assets to be determined by the availability of acceptable funding (i.e. deposits and borrowings). The relatively slower growth in Assets in 2011 of 19% (compared to our peers) is therefore a deliberate strategy to improve profitability through improved margins and quality assets.

ASSET MIX

LOANS & ADVANCES (2009 – 2011)

CREDIT COMPOSITION

FUNDING MIX

SOURCES OF FUNDING-EQUITY CAPITAL The Bank’s Stated Capital was GH¢ million, while its Tier 1 capital was GH¢ million as at 31 st December Effectively, the Bank requires GH¢ million to meet the GH¢ 60 million Stated Capital required by the Central Bank by end this year.

SOURCES OF FUNDING-DEBT CAPITAL AMOUNT BONDS AMOUNT – CEDI BONDS GH¢ million – US DOLLAR BONDS GH¢ million – CONVERTIBLE BONDS GH¢ 2.66 million GH¢ million AMOUNT BORROWINGS AMOUNT – IDA GH¢ million – GHIBGH¢ million GH¢ 5.64 million

SHAREHOLDERS’ FUNDS (2009 – 2011)

SOURCES OF FUNDING - DEPOSITS Deposit level grew by more than 47%, over the 2010 figure of GH¢ to GH¢ million at the end of There was a significant improvement in proportion of Demand and Saving Deposits in the Deposit Mix from 36% to 51%.

COST OF FUNDING The Net Interest Margin (NIM) is a measure of the difference between the interest income generated by a bank and the amount of interest paid on deposits relative of the bank’s earning assets. HFC Bank NIM was very favorable compared with its peers. HFC’s recorded Net Interest Margin of percent in 2011 higher than the peer average of 8.75 percent.

FACTORS UNDERPINNING OUR PERFORMANCE

CORPORATE BANKING BUSINESS The Bank continues to grow its Business loan portfolio with emphasis on the SME sector. Total Business loans of the Bank registered a growth rate of 15.98% last year from GH¢ million to GH¢ 140 million.

RETAIL BANKING BUSINESS As at the end of 2011 Bank had twenty-six (26) fully networked branches in the Greater Accra, Ashanti, Brong Ahafo, Northern, Eastern, Central and Western Regions. The bank also has twenty (27) on-site and off-site Automatic Teller Machines (ATMs). The Bank offers comprehensive SMS and Internet Banking services to its customers on its advanced and enhanced platform.

MORTGAGE BANKING Mortgage portfolio grew by 22.95% to GH¢ million in 2011, from GH¢ million in 2010 on account of the Public Sector Workers Housing Scheme (PSHOMES). However, the emphasis for the Consumer Loans portfolio remains on recovery.

INVESTMENT BANKING The Managed Funds Portfolio of the Investment Banking subsidiary of HFC increased by over 49% to GH¢ 84.7 million in 2011, from GH¢ 56.9 million in HFC Brokerage also had a successful year, contributing to the Group’s income.

HFC BOAFO Saving deposits grew by over 47% from GH¢ 6.78 in 2010 million to GH¢ 9.97 million in Profit Before Tax also increased from GH¢ in 2010thousand to GH¢ thousand in

HFC REALTY Profit after Tax of HFC Realty increased from GH¢351,098 in 2010 to GH¢437,438 in This represented 25 percent increase over the previous year’s Profit after Tax

GROUP AFTER TAX EARNINGS-CONTRIBUTIONS

KEY RATIOS - HFC BANK / PEER BANKS

OUTLOOK FOR

STRATEGIC OUTLOOK The Bank will complete the second phase of its capitalization exercise. The higher level of capital will be prudentially applied in the areas such as; – SME businesses, – Financing of oil and gas – Business of the subsidiaries.

OPERATIONAL OUTLOOK - 1 The Branches of the Bank have been restructured to make them more Marketing-Oriented. The new structure will ensure that the Banking segment of our business continues to focus on aggressive deposit mobilization and prudent growth in the loan portfolio. The Bank will continue with the “quality growth” posture through the; – Creation of quality loans – Attraction of lower costs deposits – Strict control of operational expenses – Aggressive loan recovery

OPERATIONAL OUTLOOK - 2 The National Pensions Regulatory Commission has registered and approved HFC Bank and HFC Investment Services Limited as Pension Fund Custodian and Fund Manager respectively under the new 3-Tier Pension Scheme. The Group will therefore take advantage of the business opportunities in the implementation of the Scheme. HFC Realty will undertake larger residential real estate projects. HFC Boafo will expand its activities to cover most part of the country to attract deposits and provide micro loans.

HFC BANK (GHANA) LTD THANK YOU FOR YOUR ATTENTION