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HF Group turnaround strategies continue to pay off as it reported Sh62.3 million pre-tax profit in six months to June 2022, reflecting 120 per cent growth from a loss of Sh318.1 witnessed in a similar period in 2021. The development brings to an end a five-year loss run on lower loss provision. The last time the listed mortgage firm reported a net profit in the first quarter was in 2018 when it recorded Sh37.06 million.

Total deposits are up by Sh1.5 billion year-on-year as foreign exchange income shored up by 49 per cent underscoring the lender’s grip on the SME market as full-service banking dividends stream in. During that period, the Nairobi Securities Exchange-listed firm saw its consolidated operating income grow by 22 per cent to Sh1.52 billion driven by fees and commissions on loans, advances and transactions. Operating Expenses declined by Sh102 million representing a seven per cent drop year-on-year.

Diversified business

HF Group CEO, Robert Kibaara attributed the enhanced performance to the turnaround strategy focused on a diversified business model and robust risk management framework. Net interest income grew to Sh1.03 billion, representing 11 per cent growth while non-funded income soared by 53 per cent to Sh173 million. The turnaround  strategy follows  a non-Performing Loans portfolio decline of 11 per cent on the back of aggressive credit quality initiatives that included auctioning and negotiated sales of property. 

This paved the way for an asset re-allocation phase that has seen yield on interest earning assets increase by 30 basis points, resulting in an 11 per cent rise in net interest income.

“We are positive that by focusing on the opportunities brought about by business diversification and maintaining superior customer experience, we will chart new frontiers of business models and continue to deliver sustainable growth in earnings,” said Kibaara.