HBFC new chief vows to overcome crisis

[LRE]

The construction group’s new CEO faces an uphill task after a SBP report slammed all aspects of the business.— Photo from APP/File
KARACHI: The new managing director and CEO of House Building Finance Corporation Limited (HBFC), has called for resolute efforts to overcome the dismal financial state of the entity, says a press release.
The financial results reveal a loss-after-tax for 2008 at Rs385 million, translating into a negative EPS of Rs1.28, while those of 2007 showed a staggering loss-after-tax of Rs572 million and a negative EPS of Rs1.91. The reported loss has left the net equity at Rs2.4 billion on Dec 31, 2008 making the HBFC capital deficient in meeting the Prudential Regulations.



A SBP assessment report considered the quality of the company’s assets unsatisfactory, management weak, capital earnings poor. It posed a monumental challenge for the new MD to turn the organisation around.



Mr Jaffri said, ‘The way forward relies on significant and measurable improvements in the asset quality; uncompromised compliance of regulatory guidelines; considerable reductions in NPLs, which are in excess of 38 per cent of the loan portfolio; meaningful curtailment of expenses that stand as one of the highest in the industry vis-à-vis revenue; continuous training of existing staff; substantial up-gradation of systems, processes, and IT; and a robust recovery plan.’



HBFC has the most extensive branch network for providing mortgage financing but its share in the housing finance business is not even remotely close to its potentials.



During the last few years, other commercial banks have stolen market share from HBFC, which had dominated the housing sector for five decades.—APP


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