, NAIROBI, Kenya, Apr 25 – High interest rates that adversely affected mortgage uptake saw Housing Finance report a 38 percent drop in sales in the first quarter to Sh2 billion compared to Sh3.3 billion posted last year.
However, the mortgage lender posted an 11 percent growth in profit after tax of Sh133.6 million from Sh120.1 million.
Cost management and credit risk measures are some factors the mortgage financier has credited to the growth.
The financier’s mortgage interest income grew by 46 percent to Sh951 million against Sh651 million posted during the same period last year.
To sustain this growth, Housing Finance Managing Director Frank Ireri said the firm will focus on risk management and operational efficiency through various cost management initiatives.
“This growth came in a year when the business is facing several challenges including high cost of funds, high cost of living and high inflationary pressure brought on by increasing costs of goods and services,” Ireri said.
In addition the firm’s Net Non Performing Advances to Gross Advances ratio reduced from 4.4 percent to 3.4 percent during the year.
Housing Finance has shifted focus to long term funding to deliver affordable solutions for its middle to lower income target market.
The firm recently signed an international financing agreement for Sh2.2 billion with the European Investment Bank for funding eligible SMEs in the construction industry.
It is currently in talks with other financiers for funding lines for the business, which should the lender hopes, will reduce reliance on short term deposits.