This archive report was first published on 14 October 2019.
October 14, 2019 - Housing Finance (HF) Group has expressed its desire to move away from the real estate sector, citing a significant decline in the sector's return on investment.
The lender, which has been struggling due to the downturn in the properties market, has backed the diversification towards diaspora and virtual banking to guide the Group's path back into profitability.
Despite the ongoing decline of the real estate sector, the Housing Finance Group has stepped up its recovery of outstanding mortgage loans in a quest to repair the bank's punctured balance sheet in the past year.
According to HF Group Chief Executive Robert Kibaara, the recoveries have improved significantly, and the bank is now focused on building a business of the future that is less dependent on one sector.
The fall of the real estate sector in 2018 dragged Housing Finance to its first full year loss in over a decade, with interest income falling sharply due to a 15 percent plunge in customer loans.
HF's Non-Funded income stalled at Ksh.1.3 billion, while the bank's non-performing loans surged forward by Ksh.5.1 billion to Ksh.13.3 billion.
However, the bank has managed to offset a total of 335 units, recovering an estimated 300 million shillings of non-performing loans in the year to June 30.
HF has also cleared a seven-year tenure Ksh.3 billion corporate bond by paying out the principal Ksh.3.162 billion to bond holders on Monday from its generated cash-reserves.
