advertisement

Markets

HF weathers 38pc drop in sales to grow profit

Housing Finance chief executive officer Frank Ireri at a past function. Housing Finance posted an 11 per cent rise in first-quarter pretax profit to 190 million shillings ($2.3 million), a sharp slowdown from the 66 per cent growth achieved a year ago as higher interest rates curbed demand for mortgages. File
Housing Finance chief executive officer Frank Ireri at a past function. Housing Finance posted an 11 per cent rise in first-quarter pretax profit to 190 million shillings ($2.3 million), a sharp slowdown from the 66 per cent growth achieved a year ago as higher interest rates curbed demand for mortgages. File 

Housing Finance has reported a 38 per cent drop in mortgage sales in the first quarter, slowed by a sharp increase in lending rates that discouraged new borrowing.

The drop in mortgage loans to Sh2 billion could point to a slowdown in the entire banking industry as a result of the steep increase in cost of loans.

The mortgage lender, however, overcame the sharp drop in fresh lending to grow its net profits by 11 per cent to Sh133.6 million, helped by higher interest income on outstanding loans.

HF’s performance provides a pointer to the expected results from its peers in the banking sector, being the first lender to file its quarter one financial report when the impact of a higher interest rate environment is expected to reflect in their financials.