Banking sees Housing Finance earnings rise

Housing Finance will seek additional funding from shareholders early next year.

This, even as it announced that a switch to commercial bank is bearing fruit.

The mortgage lender, which is now able to carry out all banking services, announced a six per cent increase in after tax profit from Sh676.17 million posted over a similar period last year, to Sh719.78 million in the nine months to September 2014.

Launch of current accounts and trading in forex were some of the factors driving up the earnings.

Managing Director Frank Ireri said the banking strategy is beginning to take shape as the firm shifts focus to provision of a complete range of retail and corporate banking products.

“The banking strategy is beginning to take shape both in terms of deposit mobilisation, income diversification and asset diversification,” he said.

Contribution from trading in forex grew from zero last year to Sh23 million while income from other fees and commission — mostly as a result of fees on current accounts — grew by 55 per cent to Sh105 million.

LOAN BOOK EXPANDED

Its loan book expanded by 29 per cent to Sh43.27 billion in the period up from Sh33.47 billion while customer deposits increased from Sh25.92 billion in 2013 to Sh33.14 billion.

Net interest income rose from Sh4.10 billion in 2013 to Sh4.57 billion.

Mr Ireri said the lender intends to seek extra funding in the first quarter of 2015 to boost its capital strength and finance growth strategy.

“Plans are underway, subject to regulatory and shareholder approval, to undertake a rights issue in the first quarter of next year,” Mr Ireri said.