House Building Finance Company Limited (HBFCL), which was heading towards a bankruptcy till the end of 2008, has turned to a profit giving company in last three years through a reform introduced by the new management. HBFCL, the country’s leading housing finance institution which has been steadily reducing its losses over the past three years besides improving its financial position will show more profits during the financial year 2011 as compared to the profit of Rs 113 million achieved in 2010.
This was said by Azhar A Jaffri, Chief Executive Officer of HBFC, in an exclusive interview with Profit. He informed that though the financial report of the year 2011 was yet to be compiled by the company the profit during the fiscal year ended June 2011 was expected to cross the profit of 2010. In financial year 2007 and 2008, HBFC reported a loss of Rs 959 million and Rs 414 million respectively. In 2009 and under the new management, the loss was further reduced to Rs.109 million, followed by a profit of Rs.113 million in 2010. HBFCL has however announced an after-tax profit of Rs95.0 million for the first half of 2011.
The improvement made during the last couple of years the outcome of a comprehensive transformation strategy that the company has been enacting for making the institution an efficient, customer-focused and profitable entity.Talking about the reforms brought since 2009 in the company, he said that the transformation and change of management, which introduced major reforms, was the basic reasons of improvements in every section of the organisation including Legal, Human Resources, Finance, Credit and Recoveries, Business Development, Customer Services, Strategy, Marketing, Corporate Affairs and Risk Management etc.
To minimise the financial burden over the company, the new management has introduced a “Voluntary Separation Scheme (VSS)” to its employees purely on their own will, under which hundreds of staff have obtained package reducing the number of staff from 1400 to 800. He said CBA Central Bargaining Agent also supported the entire process and a number of union members including chairman and general secretary also availed VSS offer. He said the key component of VSS strategy is to turn HBFCL into customer-focused and profitable entity.
The CEO said that the company being the prime housing finance institution of the country, was providing affordable housing solutions to low and middle income groups of population by encouraging new constructions in small & medium housing (SMH) sector. The company was also supporting small builders besides introducing bulk housing finance. In reply to query, Jaffri said that the recovery of the company has however been affected badly by the current rate of inflation and the devastation of flood in the country last year. HBFC was facing Rs 300 to 400 million short falls in recovery.
To question he said HBFC has now started constructing building on its own lands both in Islamabad and Lahore which would increase the asset and income of the company. To another question he said, HBFC encouraged such builders who built houses for low income group. Being a housing financing institution, HBFC has made efforts to promote low income groups besides promotion for supply of the low cost housing. In reply to query that whether only builder and middle class were being facilitated by the company, he said, the average loan was ranges between Rs 0.5 million to Rs 0.8 million proving that the lower lass people. Talking about new projects, he said, the company was also considering to finance the projects of building government offices as the issues was initially discussed with Federal Minister of Housing and Works Faisal Salih Hayat.
Besides, a proposal has also forwarded to HBFC to finance a low cost housing project at Sehwan Sharif to be introduced by Sindh government, he said. He also informed that the company had made Rs 100 million contribution in Prime Minister’s Flood Relief Fund in 2010. It has also pledged to contribute Rs 25 million to send required food and medicines to the flood affectees.
Self boasting! Full of lies and false claims. Three years of this man's reign of terror was frightful for the customers and employees alike. Why has he concealed his fight with Association of Builders and Developers, who have been ruined by him in one way or the other, and resultantly also ruined the HBFC? Now that, his reign of terror and utter inefficiency has finally ended, thanks to Almighty Allah, but still he is clinging to his chair with the blessing of some influential people totally illegally and unauthorisedly. BY GIVING THESE TYPES OF FALSE AND BOASTFUL CLAIMS, HE IS TRYING HARD TO GET FAVOUR OF AUTHORITIES TO BUY THREE YEARS MORE TO COMPLETELY STRANGULATE THE COMPANY! Your paper should have been more vigilant to publish the false claims, and describing an ex-MD as a current MD.
This is total concealment of facts.The performance of HBFC is deterioratingsince Mr. Jafry joined as CEO. HBFC sanctioned 6100 loans in 20-05, 5668 in 2006, 6743 in 2007, 6205 in 2008. From January,2009 to June,2011 HBFC only sanctioned 2202 loans. The No. of Accounts decreased from 1,16,445 to 72023 in three years ie. 2009 to 2011. No of Zonal Offices decreased from 12 to 9 and Dsitrict Offices from 58 to 50.The performance has been decreased in every field. The profit shown is only reversal of provisions made during 2006 to 2008. All funds of HBFC have been placed in private Banks to get vested interests. The newspaper should find facts before publising self made story.
The newspaper should have asked one simple question: in all these three years, we have not seen "you" and your "company" anywhere in providing housing facilities to 'baichara', 'ghareeb' people of this country. What were you doing, transforming it? And what is the sign of this boastful 'transformation'? Who has seen this transformation? Today, if anybody visits HBFC, one feels as if he has come to a graveyard, where there is no work, no activity. With lack of any activity, and almost no loaning, how HBFC is doing business, and would earn profit? Probably, this man has some magic wand to hoodwink the regulator (SBP), and the Government!!!!
In the first week of January 2012, Azhar Jaffri completed his incompetent and inefficient rule of three years. On 7th February 2012, the Pakistan Today is showing him as the CEO of HBFCL. He cannot present himself as even the employee of a government owned public sector organization, let alone claim himself to be the head this PSE. The newspaper is also equally participating in this act. This is impersonation. This is criminal act. The FIA must take notice of this crime!
Was it a paid advertisement? From the style of writing it seems to be written by a Pakistan Today staffer though. A very non-professional newspiece I must say. As seems from the comments above all the boastings of the guy appear to be lies. The editorial staff must have sought independent opinion on the assertions and view from some employees of the corporation and some former executives who allegedly brought the corporation to the brink of the allegedbankruptcy. Pakistan Toady's editors did fail its reader in their right to know the real facts and not to be duped by a boasting public servant. Roll up your sleeves please, PT editors!
Jaffri and his internationally experienced team have brought sustainable and progressive change to the organization. Now unlike PIA, KESC and the like, HBFCL contributes to the. National exchequer and no longer requires subsidies. The VSS was unprecedented in its success in that former employees have been refrained from filing suit to return due to contract, inlike the failed SME Bank, PIA, KESC etc. SBP and Ministry of Finance as well as the FIA have done thorough investigations of the allegations against HBFCL and the transparency of the organization’s actions is clearly documented. Its not only the media but also the regulatory authorities who are shocked at the transformation and the stamping out of the corruption. HBFCL is being hailed by banking insiders as one of the most aggressive yet successful change management excercises in Pakistans history. Hats off to jaffri and his team!
I find the comments above remarkable in their ignorance, notwithstanding Mr. Khan. They also seem to be from disgruntled employees and detractors with clearly no understanding of what is required for a change management exercise when attempting to turn around a company in total loss and a shameless drain on government resources. One cannot lend when one is in debt. One must stop lending, focus on recovery, increase value of recovered monies, and only then begin lending. The comments above a are a shame and reflective of the myopic mentality of most of Pakistans working class. It is precisely this mentality that is the failure of most organizations in PK. HBL, Allied Bank, UBL etc are outstanding examples of financial institutions conducting successful turnarounds in PK despite the anchor around their necks of the ignorant uneducated middle and lower management. As a consultant to some of the above named bank, I have also closely watched HBFCL implement IFC’s recommendations under Azhar Jaffri’s leadership and prevent it from an inevitable death at the hands of the detractors arguing ignorant business models and metrics as written above. I second Mr. Khans appreciation for HBFCL’s turn arund and would recomend he take his entire team to PIA or PTCL next.
Good
Not single financial institution is ready to accept so-called professionals GHs.
What an Effort …cheers 🙂
Why the DFI are not accepting the professional management's team??
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