HF half year profit soars

July 23, 2009
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, NAIROBI, Kenya, Jul 23 – Housing Finance (HF) has registered a 124 percent growth in pre-tax profit in the half year ending June 30, posting Sh132 million compared to Sh59 million during a similar period last year.

HF Managing Director Frank Ireri attributed the growth to strategic initiatives the company put in place in the last two years key among them being strategic market segmentation.

“We have really worked hard to widen our market from just focusing with employed people to civil servants, and self employed people,” he told a media briefing on Thursday.

He expressed optimism that the company’s recent move to finance affordable housing had  driven volumes and helped sustain high growth this fiscal year.

Mr Ireri disclosed that the mortgage lender had additional capacity to provide affordable housing solutions through innovative financing as well as high yield saving accounts.

He sighted launching of innovative products as another driver for the company’s success which had increased its customer base.

“Our main goal is to convert rent payers into home owners and the way to do that is by constantly providing them with products that best suit their needs.”

During the period under review sales increased by 98 percent to Sh5.4 billion up from Sh2.7 billion in June 2008 while mortgage interest income went up from Sh494 million to Sh703 million marking a 42 percent increase.

Housing Finance customer deposits sit pretty at Sh11.2 billion and the firm has an additional lending capability of Sh28 billion with a deposit taking capacity of Sh24 billion.

During this year’s finance budget Finance Minister Uhuru Kenyatta introduced pension backed mortgages a move Mr Ireri was pleased with.

“Obviously now retirees can have money to invest in building homes which sits well with us going forward.”

But at the same time Mr Ireri was cautious given the slow economic growth, rising inflation and high cost of living which has restricted saving capacity by individuals.

“These factors are eroding the value of money and ultimately call for prudent saving strategies and investment in products offering higher returns,” he said.

He said he saw no signs of interest rates dropping any time soon but was glad the Central Bank through the Monetary Policy Committee was working towards stabilising the rates.

‘What we have seen despite devaluation of the shilling, high inflation rates and effects of the post election violence interest rates although they went up during third quarter but non the less stable.”

During the current financial year the company intends to strengthen collaboration activities anchor shareholders and set up cost management strategies across its operations in response to the current economic slow down.

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