HF Group posts profit up 26 per cent

Mortgage financier HF Group posted a 26.2 per cent growth in net profit in the half year ended June on increased lending and property sales.

The Nairobi Securities Exchange-listed firm said its net earnings in the period stood at Sh612.5 million compared to Sh485.1 million a year earlier.

HF did not declare an interim dividend for the period, indicating a move to conserve cash. The company paid an interim dividend Sh0.65 per share for the same period the year before.

The performance came as interest income rose 21.5 per cent to Sh4.4 billion, partly reflecting a 6.9 per cent loan book expansion to Sh53.4 billion.

HF also raised its investment in government bonds and T-Bills to Sh3.7 billion from Sh515.5 million.

“The group also increased its holding of government securities … to take advantage of the improved yields on government paper as well as building a sinking fund towards liquidation of the first tranche of its corporate bond expected in October 2017,” HF said in a statement.

REDEEM BOND

HF is set to redeem Sh7 billion worth of its seven-year bond it issued in 2010.

The firm’s ‘other income’, expected to capture property sales, rose 35.8 per cent to Sh416.9 million.

HF’s operating expenses increased 18.5 per cent to Sh1.6 billion as interest expenses rose 21.3 per cent to Sh2.4 billion

Customer deposits expanded 6.1 per cent to Sh39.7 billion, partly causing the jump in interest paid to savers.

The company’s loan loss provisions increased by Sh21.6 million to Sh304.9 million as the gross bad loans rose by Sh1.2 billion to Sh5.3 billion.