Companies

Housing Finance cuts loss by 82 percent on reduced costs

alushula

Summary

Housing Finance cuts net losses by 81.6 percent to Sh110.1 million in the year to December 2019.

Housing Finance #ticker:HFCK has cut net losses by 81.6 percent to Sh110.1 million in the year to December 2019 despite a fall income, helped by reduced operating costs.

The previous year the lender had posted a loss of Sh598.2 million, even as it slowed its loans and advances to customers.

Operating expenses dropped by Sh726 million or 17.1 percent to Sh3.51 billion, helping the lender to halt widening of the loss.

The fall in costs was hugely supported by 12.1 percent or Sh149 million drop in staff costs, while loan loss provision was also cut by seven percent to Sh350.4 million. The bank had laid off 36 employees in 2018.

Net interest income, mainly from loans and advances to customers, dropped by 13.2 percent to Sh1.97 billion on account of slowed lending. HF’s loan book shrunk by 11.3 percent to Sh38.55 billion during the period.

Non-interest income, which is generated from fees and commission, dropped by 6.4 percent to Sh1.4 billion.

The bank’s core capital has also dropped from Sh7.37 billion to Sh6.01 billion but remains well above the statutory level of Sh1 billion.

However, liquidity ratio has thinned to 20.8 percent, being 0.8 percentage points above the minimum level required by the banking regulator.

HF’s share has shed 30.3 percent in the last three months and closed Monday trading at Sh4.18 on the Nairobi Securities Exchange #ticker:NSE.