Lower cost, high income grow HF Group's half-year net profit to Sh50m – VIDEO – Business Daily
HF Group head office in Nairobi. FILE PHOTO | NMG
HF Group Plc returned a net profit of Sh49.8 million in the half year ended June on lower expenses and higher income from lending and transactions. The company reversed a net loss of Sh346 million a year earlier.
Non-interest income increased to Sh498 million from Sh325.1 million while total interest income rose to Sh2.07 billion from Sh1.98 billion.
HF’s operating expenses declined to Sh1.46 billion from Sh1.56 billion. The mortgage financier’s loans and investment in government securities were barely changed, indicating that it benefitted from higher yields on the debt portfolio.
Interest rates on commercial bank loans, T-bills, and bonds have risen in recent months amid higher government borrowing and galloping inflation.
HF’s return to profitability comes as its parent firm Britam Holdings plans to sell its stake in the mortgage financier as part of its strategy to reduce its portfolio of listed equities.
Britam recently said it could sell all or part of its 48.2 percent equity in HF within one year. The process of divesting from the Nairobi Securities Exchange-listed firm, which intends to transform into mainstream banking, started last year.
Britam, which has written off a substantial part of the investment it made in HF, says it acquired the stake as a means of expanding in the real estate and mortgage industry.