HF Group’s Rehani House head office on Kenyatta Avenue in Nairobi. FILE PHOTO | NMG
Summary
- HF Group's profit after tax dropped to Sh159.7 million in the nine months to September compared to the Sh837 million it made in the same period last year.
- The bank said it had embarked on “cost management measures” that it expected would help it reduce its expenses. It did not say which specific measures they were undertaking.
Mortgage lender Housing Finance (HF) is
looking to cost cutting after its net profit for the first nine months
of the year plunged 81 per cent as non-performing loans swelled this
year following the introduction of interest rate caps.
The
group’s profit after tax dropped to Sh159.7 million in the nine months
to September compared to the Sh837 million it made in the same period
last year.
Its interest income from loans dropped 16.7
per cent to Sh5.1 billion contributing to the 25 per cent in total
operating income as total operating expenses were barely changed
year-on-year.
The bank said it had embarked on “cost
management measures” that it expected would help it reduce its expenses.
It did not say which specific measures they were undertaking.
Gross
non-performing loans jumped 47.3 per cent to Sh8.1 billion in what the
company said was a “slowdown in the property market and overall
unfavourable macro-economic conditions”.
The real
estate sector has been hurt from a politically charged environment that
kept investors away for most of this year and the adverse effects of an
interest rate caps law introduced just over a year ago.
Housing
prices in Kenya dropped the most in three years in the third quarter of
this year, the Kenya Bankers Association said last month.
HF
Group chief executive Frank Ireri said in a statement accompanying the
nine-month financial statements that he expected the company to perform
better in the last quarter of the year when two of its projects —
Komorock Heights and Richland — are completed.
Mr Ireri
said HF would also benefit from funds that will be released once
pending transactions are completed as expected when the government
normalises the property conveyance process at the Ministry of Land
registries.
The ministry has been carrying out reforms
with a view to improving the process of land transactions and ensuring
the sanctity of title deeds as well as reducing fraud.
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