RESERVE BANK OF FIJI
_________________________________________________________________
ADDRESS BY
GOVERNOR OF THE RESERVE BANK OF FIJI
BARRY WHITESIDE
AT THE 3rd ANNIVERSARY CELEBRATIONS OF HFC BANK
4 March 2017
Mr Tom Ricketts. Chairman of the HFC Bank Board
Members of the Board
Mr Raj Sharma, Acting Chief Executive Officer
Management and Staff
Members of the media
Invited Guests
Ladies and Gentlemen
Bula Vinaka and a very good morning to you all!
Introductory Comments
I am pleased to join you in celebrating this special day, marking the 3rd
Bank's
anniversary of HFC operations as a commercial bank. I always welcome
such opportunities to celebrate the achievements of our licensed financial
institutions as they confirm to us the commitment and resilience they have to
continue to serve our people.
The Fijian financial system has evolved significantly into a modern, reputable
and stable one, which has safely steered our economy through the past two
decades, and is considered the most advanced amongst our Pacific island
countries.
Three years ago when the Reserve Bank of Fiji first received an application for a
commercial banking licence by Home Finance Company Limited there was a bit
of hesitancy on our part to accept the proposal. However, with the
acknowledgement of the performance of HFC as a licensed credit institution for
18 years, the commitment of strong shareholders, and also the strengthening of
Reserve Bank's
the own regulatory capacity, it was agreed that it was an
opportune time to allow a locally owned bank to operate.
It was, however, not a light decision as HFC Bank will acknowledge, with the
Reserve Bank setting high expectations for the institution and continuing to
closely liaise on necessary regulatory matters, in line with our mandate of
protecting Fijian depositors.
I therefore wish to congratulate the shareholders of HFC Bank, its Board,
management and staff for this milestone we are celebrating today, achieved
through great dedication and teamwork.
HFC Bank
Ladies and Gentlemen, from the humble beginnings of a home loan provider in
1962 and later as a licensed credit institution with services limited to providing
term deposits and loans limited to mortgage financing, HFC today boasts a vast
offering of financial services akin to other banks in Fiji.
Substantial and necessary investment into its technological platform has also
made it possible for the institution to provide secured online banking services
which will also soon include bill payment capabilities. HFC Bank has further
invested heavily in refurbishing its branches to be on par with other commercial
banks and has increased its presence with the installation of its first ATMs.
user of the Reserve Bank's
I acknowledge the Bank for being an active import
substitution and export finance facilities. We continue to encourage banks to
utilise these services for the benefit of their customers.
HFC's achievement in this three year period
Ladies and Gentlemen, is testament
to public confidence in the Fijian banking industry and in a growing Fijian
economy. I would like to take this opportunity to make some comments on the
significant contributions made by our financial institutions to the growth of our
economy, and towards ensuring the maintenance of a sound and safe financial
system.
The Fijian Financial System and the Commercial Banking Industry
The gross assets of the Fijian financial system stood at $17.5 billion at the end of
2016, nearly twice the size of our GDP. 51 percent of that was held by the
commercial banks alone, making the banking industry the most dominant sector
in our financial system.
Commercial banks in Fiji have grown in terms of the size of their balance sheets,
and the scope of their services and product offerings. They have also extended
their reach to areas once unbanked, through their increased footprints and
financial inclusion initiatives, including financial literacy.
The range of banking customers in Fiji has also expanded significantly, with
banking services provided at the early ages of primary school to tertiary
education, and then to the other end of the spectrum acknowledging the
importance of our retiree population and senior citizens, who are being offered
products designed specifically to meet their financial status.
Commercial banks have also established their presence in Fiji by driving
investments through their basic function of intermediation, paying taxes and
providing employment. Ladies and Gentlemen, like any other business, all these
cannot be achieved without extensive investments by the commercial banking
industry.
One just has to look at the significant development in Fiji's banking
infrastructure to understand the extent of commitment made by commercial
banks in Fiji to ensure that most Fijians are financially included. The Reserve
Bank continues to work with them in this area.
The number of EFTPOS terminals available to our people has increased from
2937 in 2011 to 6081 at the end of 2016, while the number of ATMs increased
from 212 to 326 in the same 5-year period. All commercial banks in Fiji have
continuously upgraded their core systems, costing millions of dollars, to enhance
how they do business and improve services to their customers. Competition has
been strong.
Ladies and Gentlemen, because of the important service that commercial banks
provide, it is vital that we ensure that they continue to operate soundly and
safely. The soundness and safety responsibility is at the core of the Reserve
Bank's financial stability mandate. Banks are to ensure at all times that they are
well capitalised and earning adequate profits to sustain their operations. Banking
business is a business of managing risks, and it is important that commercial
banks have robust frameworks to identify and mitigate the risks inherent in their
operations.
Market conduct and consumer protection have also come to the fore of banking
in recent years. Commercial banks in Fiji are continuously reviewing their
processes to ensure that these issues are managed effectively. The Reserve Bank
of Fiji expects all banks to prioritise customer complaints and ensure the
efficient and effective resolution of these at all times.
The banking sector, in the coming months, will embark on further improving its
payments infrastructure by participating in the Fiji Interchange Network
Payment system, or what has often been referred to as a national switch. Having
a central national switch will further allow the efficient provision of payment
services and in due time provide cost savings for banking customers.
Closing
In closing, I would like to again congratulate HFC Bank on achieving 3 years of
commercial banking, but also HFC as a financial institution for having served
the people of Fiji for the last 55 years.
As the institution's regulator, it would be remiss of me if I do not remind the
HFC board and management of the importance of the task they have ahead of
them, which includes their duty to serve the public interest by ensuring a good
governance environment and a strong risk management culture.
We wish HFC Bank the very best for the future, and look forward to the many
years of great service that they will provide for all Fijians.
Vinaka vakalevu!
END.