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HF GROUP Q1 profits jump to Kes37Mn
Group banks on digital channels and healthy projects pipeline to unlock sustainable growth AfricInvest acquisition of 14.83% stake in Britam poised to benefit HF Group
Housing Finance Group posted quarter one after tax profit of Sh37 million for the period ending March 31, 2017.
Total Interest income declined by 12.9 percent during the period under review to Kes 1.612 billion down from Kes 1.85 billion recorded in 2017. Correspondingly, net interest income also declined by 12.6% from Kes 797 million in a similar period in 2017 to Kes 697 million.
Total non – interest income increased by 64% due to property sales while total operating expenses increased by 10.3% on the back of cost of houses sold during the quarter. Non-performing loans increased during the period to Kes 8.47 Billion from Kes 7.78 billion in 2017 due to unfavorable macro-economic conditions that affected the property and financial sector
Customer deposits declined by 8% to Kes 35.9 billion down from Kes 38.2 billion recorded in 2017. Loans and advances to customers also decreased by 11% from Kes 54.59 billion in 2017 to Kes 48.78 billion in 2018.
In the short term, the Group earnings is expected to be impacted by the further reduction in the CBR rate to 9.5%. The Group has shifted focus to deepening its digital banking proposition with investment in online banking and mobile app channels to increase accessibility to customers and grow non – funded income streams. The Group has also consolidated its real estate development business as a provider of affordable housing and is geared to tap into the National Government’s big four agenda. These initiatives are earmarked to improve the Group performance in the medium term – long term.
The recent acquisition of a 14.83% shareholding of HF’s strategic investor Britam by Pan African focused Private Equity Group AfricInvest is a potential boost to HF Group.
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