Mortgage Financier Housing Finance Group announced Thursday its profit after tax rose 23 per cent to Sh1.2 billion for the year ended December 31, 2015 compared to Sh975 million during a similar period in 2014.
HF Group Managing Director Frank Ireri attributed the leap in profitability to a rise in interest income from the group’s banking and mortgage lending subsidiary HFC and profits from sale of properties by HFDI (HF Development and Investment) during the year.
“Despite last year having been a challenging one, we have been able to get a good return. The growth in profitability is mainly due to our diversified banking, property development and insurance strategy,” Mr Ireri said when the group released its full year results at an investor meeting.
The group’s net interest income grew by 19 per cent to Sh3.6 billion from Sh3 billion. Its total non- interest income increased to Sh1.17 billion from Sh843 million (39 per cent increase) on account of increased house sales during the year.
SOLD 500 UNITS
HF Development and Investment subsidiary completed and sold 500 residential units namely Komarock 5B, Precious Gardens phase 1, Kahawa Downs, one retail commercial development (K-Mall) and also launched the construction of Komarock Heights phase 1 which comprises 480 residential units.
Meanwhile its loans and advances to HFC customers increased by 17.2 per cent to Sh53 billion from Sh45.2 billion in the previous year following continued uptake of new banking products.
“The year was characterised by an unstable shilling as well as high interest rates that made customers shy away from taking loans as well as pushed up the cost of doing business for banks,” said the lender.
Gross non-performing loans ratio declined to 7.7 per cent from 9.5 per cent as a result of continuous collection on NPL accounts, the lender explained, as well as improved credit underwriting and monitoring practices during the year.
It is the first time that the company is reporting its financials as a group, having restructured in August last year.
HF Group Mr Ireri revealed, it is looking at growing its mortgage lender and banking subsidiary HFC to be a top 10 commercial bank by 2020 by tapping into retail and corporate banking as well as property finance.