This archive report was first published on 29 August 2019.
On August 29, 2019, the Housing Finance (HF) Group announced a Ksh.97 million loss for the first six months of operations in 2019.
The loss, which is a significant reversal from the Ksh.6.8 million profit recorded in the preceding year, can be attributed to a decline in both loan issuance and deposit mobilization.
Customer loans fell by 16.7 percent over the period to Ksh.2.5 billion, while deposits decreased to Ksh.886.4 million from Ksh.1.1 billion as of June 30, 2018.
Despite the decline, the lender registered improved recoveries in its non-performing loans (NPLs) portfolio during the period, with the bank's aggregate bad loans easing slightly to Ksh.13 billion from Ksh.13.3 billion at the end of 2018.
The improvement is attributed to aggressive loan recoveries through property sales and auctions, which saw the bank offset 335 units in the period.
As a result, the Group's revenues from non-interest funded sources grew by 33.1 percent to Ksh.914.2 million from Ksh.586.6 million.
The Group also registered a consolidation in its costs management, having held down both staff costs and asset depreciation.
HF Group Chief Executive Officer Robert Kibaara stated, 'This new channel is part of our digital banking strategy and is reflective of our commitment to provide innovative financial solutions that enhance customer experience through ease of access, convenience, safety and simplicity.'
He further added, 'Our business transformation strategy is paying off and given the trend in performance, we project a turnaround to profitability by end of 2019.'
The bank will contend with the repayment of a paltry Ksh.3 billion in October, which makes for the second tranche of its Ksh.10 billion corporate bond issued in 2010.
The bank expects to finance the repayment of the bond through internally generated cash flows, which will exert pressure on the Group's Cash and Cash Equivalents (CCE).
