Housing Finance halts borrowing plan
What you need to know:
- Britam Wednesday announced a 147.7 per cent oversubscription of a similar borrowing programme raising Sh7.4 billion against a target of Sh3 billion.
- Total non-interest income grew significantly by 241 per cent to Sh506.29 million from Sh148.4 million mainly from two of its subsidiaries Kenya Building Society and Housing Finance Insurance Agency.
Housing Finance Group has suspended a planned borrowing of Sh20 billion citing an expensive debt market environment.
The Capital Markets Authority had granted the mortgage financier approval to issue a medium term note in November last year with the offer valid until 2016.
However, the firm now says it will not be exploring that option in the short term due to heavy government borrowing that has pushed up the 91-Day Treasury Bill rate.
“Despite the successful Eurobond, the 90 day Treasury Bill is trading at a high of 11 per cent,” HF managing director Frank Ireri said. The mortgage lender will, instead, turn to its key partner, Britam, to explore other funding options.
Britam Wednesday announced a 147.7 per cent oversubscription of a similar borrowing programme raising Sh7.4 billion against a target of Sh3 billion.
The company, which currently holds about 21.3 per cent stake in Housing Finance, plans to buy additional shares by acquiring Equity Bank’s 24.76 per cent stake to bring its holding to 46.08 per cent.
At the same time, HF announced a 19 per cent rise in after tax profit for the half year riding on income diversification strategies.
The real estate company realised Sh474.44 million compared to the Sh407 million recorded over a similar period last year.
Total non-interest income grew significantly by 241 per cent to Sh506.29 million from Sh148.4 million mainly from two of its subsidiaries Kenya Building Society and Housing Finance Insurance Agency.
“HF also realised income for the first time from forex trading which added Sh17.09 million to its non-interest income,” said Mr Ireri in a statement.
Mobilise deposit
He said the group will focus on mobilising deposits from savings and current accounts as opposed to corporate deposits which have put pressure on its margins.
Britam recently announced plans to acquire Equity Bank’s shareholding in Housing Finance to bring its direct and indirect control to approximately nearly half of the issued share capital of the company.
