HF Group’s net profit for the six months ended June 2025 grew by 134.4 percent on the back of increased interest income from lending to the government.
The listed mortgage lender reported a net profit of Sh624 million, up from Sh266 million in a similar period the previous year.
HF rode on the near doubling of interest from government securities to Sh1.2 billion from Sh675 million, following increased investment in Treasury bills and bonds. Its portfolio of government securities rose to Sh23.8 billion from Sh12.1 billion a year earlier.
The group has subsidiaries in banking, bancassurance, custodial business, and property management.
“Our strong performance is a clear demonstration of the success of our transformation and diversification strategy, which continues to drive growth across our subsidiaries,” HF Group chief executive officer, Robert Kibaara, said.
The banking arm of the group was the key driver of the group's performance, with its net profits growing fivefold. The bank, which was recently upgraded to a mid-tier lender, posted after-tax profit of Sh488 million, up from Sh95 million in the period under review.
The bank's loan book expanded by five percent to Sh39.8 billion, underlining a cautious approach to lending in a tough macroeconomic environment that has seen bad debts in the banking sector pile to historic highs.
HF’s gross non-performing loans were Sh11.4 billion, which is 28.4 percent of its loan book, higher than the industry average of 17.4 percent.
Customer savings with the bank rose 16.4 percent to Sh52.6 billion, but declining interest saw the bank cut its cost of funds. The bank’s interest expenses fell 6.6 percent to Sh1.5 billion from Sh1.7 billion, with improved liquidity helping the bank cut on borrowings.
Management disclosed that other subsidiaries of the group also recorded profit growth during the first half of the year.
“All operating subsidiaries delivered growth in profits,” said the group in a statement. “The Group posted an 18 percent growth in non-funded income, which grew to Sh844 million, on the back of increased fees from its banking subsidiary’s custody business and the property subsidiary’s project management fees and commissions,” it added.
HF growth has seen the lender increase its market share to one percent, leading to its categorisation as a mid-sized bank. The growth follows a Sh5.99 billion cash call last year to improve its capital position and allow it to push for more business.
Its core capital to total deposits, which had fallen to below the regulatory requirement before the rights issue at four percent, was 17.1 percent, nine percentage points above the minimum required eight percent, despite the growth in its deposit base.
The core capital to total risk-weighted assets was 21.3 percent against a statutory 10.5 percent, indicating the headroom the lender is currently enjoying to grow its loan book.
HF Group trading counter at the Nairobi Securities Exchange has risen 112 percent in the last year despite issuance of new shares under the cash call, as investors look at having a pie of the real estate sector where HF plays a role as a mortgage lender. The counter has attracted government insiders, including the Leader of the Majority in the National Assembly, Kimani Ichung’wah, and former chairman of the Kenya Revenue Authority, Anthony Mwaura.
