Managing Director of HFC Bank Robert Le-Hunte has told Citi Business News that it will be difficult for banks not to increase their interest rates.
According to Robert Le-Hunte, the increase in the Bank of Ghana’s policy rate by 100 basis points from 24 percent to 25 percent is a clear signal for the banks to raise their lending rates to remain profitable.
The monetary rate is the rate at which the Central Bank lends to commercial banks and is also used by banks to calculate their base rates.
Industry players in the banking sector had warned that though the hike may tame inflation, banks will increase interest on loans as well as reduce access to credit.
Ghana has one of the highest interest rates in the world. Interest on bank loans in the country on the average are currently going for between 25 and 35 percent.
However pressure has been mounting on the financial sector, especially commercial banks not to increase their interest rates weeks after the Bank of Ghana increased its monetary policy rate citing inflationary pressures and uncertainties within the foreign exchange market as the main reasons for the increment.
Managing Director of HFC Bank Robert Le-Hunte was optimistic the lending rates will drop after a while.
“There is a formula for which banks work out their minimum lending rate and that formula is handed over from the central bank so therefore when the BoG sends a signal to increase the rate it automatically raises.’
HFC Bank this year donated over GH¢340,000 to 14 institutions as part of the bank’s corporate social responsibility contribution to society.
Some of the institutions that benefited are Ghana Blind Union, Ridge Hospital, and the Accident Centre of the Korle-Bu Teaching Hospital, Ghana Hearts Foundation, Catholic Action for Street Children and Help Age Ghana, Bonwire Anglican Primary school, among others.
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