Local bank reflects on growth, challenges

HFC Bank Ganilau House Branch in Suva. The local bank says it is proud that it had achieved double digit profit.

IT was back in 2005 when there were talks of Home Finance Company Limited converting to become a bank. At that time, HFC Finance was considered a credit institution and offered similar banking services as those of commercial banks except for savings account, cheque accounts and foreign exchange transactions. But it was not until 2014 when HFC finally realised that vision. Four years later the bank has a new CEO and is hitting double digits in profit. This is the second part of a four part series interview with CEO Rakesh Ram with Business Times.


BY the end of June this year, HFC Bank was proud that it had achieved double digit profit, which really should be normal for any bank.

It was the first time that the bank had achieved that in a financial year since it became a bank.

However, as CEO Rakesh Ram states they are proud that it had been achieved in a market where there is stiff competition and bigger players.

One of the unique features of HFC Bank is that all its staff members are local and Ram says they have had to ensure the capabilities of these staff were enough so the bank could effectively “stand shoulder to shoulder with bigger, larger established banks’.

“At the end of the day we are definitely in the right direction,” Ram said.

“We are building a big commodity, we have a very young team. We are mixing people both from internally and there are some external recruitment who I think they will build the capability for HFC bank.”

Of course, one of the biggest challenges the bank faced was the conversion from a finance company to a commercial bank.

“It is very difficult and we are only four years old. A finance company has got its own operating models, structures  and regulations whereas commercial banks also have international regulations… you are basically operating internationally like America, Australia, and Fiji.

We have to follow international regulations, benchmarks, perimeters and so on.”



HFC chief executive officer Rakesh Ram.                                            Picture: FILE



As difficult as it may seem, Ram says HFC bank has done very well in the last four years since converting to a commercial bank in various areas such as in sales, in deriving its own policies, getting the right people and getting into the right direction and leadership.

“I think what this specifically means is that we have complied in every aspect whether financial or with Fiji Revenue and Customs Service.. whatever it maybe, we set the right foundation.

“But it was not easy because we don’t have international expertise, we don’t have international access to experts, staff, funding and technology. So despite that, I think we have celebrated a very strong platform.”

Ram who joined the month six months ago said the strong platform enabled him to really grow the business in the right direction.

So, what can HFC Bank do differently to give it the edge over its competitors?

“I believe we can add significant value in building relationships where we know the market and our customers.

“We know the market and we know our culture.

“Our decisions are all made here we don’t have to rely on decisions made from outside the country.”

What Ram meant is that HFC Bank can tailor make their products to suit the local market.

And by doing so, it creates a niche market in Fiji.

“As a small bank we cannot really effectively compete in all sectors of the market.

“Our strategy is to strive for simplicity, focusing on simple products that suit our  customers’ needs.

“We need to build that respect and trust with our customers as relationship is important and bring the common sense banking back to Fiji.

“What we are trying to say from a common sense banking point of view is that HFC bank is at an advantage position in that we can make our own model.

“We are not of a matured bank that we only have to stick to the model as long as we are compliant with our policies, regulations and governance.

“We are very flexible to accommodating customers request but it does not always have to be lending or borrowing. It has to be how we can create a better savings opportunity.”


HFC marketing and corporate relations officer Natautava Rokotuibau, audit officer Joyti Devi and HFC chief executive officer Rakesh Ram.  Picture: SUPPLIED



One of the challenges though of being a local and small bank is that it that it does not have the network or connections as other big banks.

Basically, it means HFC Bank is not internationally known so one of the efforts of the bank right now is to create agency banks across the globe.

This would be vital in trade and foreign exchange payments.

“So, we have difficulties getting the right correspondent bank at the right cost .

“We are doing well now, we have got very strong correspondents based on our requirements but we need to work in this area because our business is now growing.

“The other challenge in terms of comparing with an international bank is the staff capability.

“We don’t have the opportunity to just go and bring experts. When I was in another bank they used to talk about connectivity meaning that they can connect to one staff to the next staff to the different part of the world or they can get the staff to come and work for you.

“I’m absolutely proud that I am running a local bank in Fiji with totally 100 per cent local staff, I have no doubt that we have the right people here to build that capability.”


Next week: HFC Bank and its products

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