Housing Finance’s profit rises 7.8pc to Sh837.7m

Mortgage financier Housing Finance Group has posted a 7.8 per cent jump in net profit in the nine months ended September, driven by earnings from government securities and loans.

The Nairobi Securities Exchange-listed firm said net profit at the end of quarter three stood at Sh837.7 million compared to Sh777.4 million in a similar period a year earlier.

Income from government papers such as Treasury Bonds and Bills grew more than six fold to Sh357.2 million, while interest income from loans and advances grew by nearly a fifth to Sh6.1 billion.

“Over the nine months, we have been able to substantially grow our footprint across the country and this enabled us to recruit more customers and in turn grow the loan book as well as mobilise deposits from a larger customer base,” said Frank Ireri, HF’s managing director.

HF’s net interest income grew 14 per cent to Sh3.1 billion during the nine months compared to Sh2.7 billion over the same period in 2015. The financier also raised its investment in government bonds and T-Bills to Sh4.2 billion from Sh255 million in September 2015, after Kenya passed a law on interest rate caps.

The Kenyan unit returned an after-tax profit of Sh856.5 million as at September, which is higher than the group net profit, an indicator that HF’s subsidiaries made losses in the period under review. Its commercial subsidiaries are HFC Limited, property development firm HFDI, and HF Insurance Agency.

READ: HF Group posts 26pc net profit increase in first half of the year

The company’s other income, expected to capture property sales, tripled to Sh410.1 million highlighting increased uptake of its real estate projects.

HF’s loan loss provision was up 17 per cent to Sh494.8 million, reflecting deteriorating asset quality. The gross volume of non-performing loans surged by more than a third or 36 per cent to hit Sh5.5 billion from Sh4.07 billion in September 2015.