Kenyan mortgage lender posts Sh141m profit

July 21, 2010
Shares

, NAIROBI, Kenya, Jul 21- The stable macroeconomic environment that the country has enjoyed over the last few months continues to favour various companies with many reporting impressive results for the first six months of the year.

Housing Finance (HF) on Wednesday announced a 53.5 percent rise in profit after tax to Sh141.7 million for the period ended June 30 over the corresponding period last year, on the back of the country’s economic recovery.

“We have seen a 56 percent increase in profit before tax from Sh131.9 million this time last year to Sh206.2 million. In terms of liquid funds, we have seen an 88 percent increase to Sh5.8 billion while our mortgage book, which is our bread and butter, has gone up by 39 percent to Sh15.1 billion over the period,” Managing Director Frank Ireri explained.

Loans and advances went up to Sh16 billion while the net interest income rose by 21 percent to Sh663 million during the period under review.

The board recommended an interim dividend payout of Sh0.35 which is the first time in 10 years that the company is making the payment.

The mortgage lender said the outlook for the year looks bright if low interest rates and inflation levels and the robust demand for mortgages prevail. The upcoming referendum however continues to cause political jitters and HF just like the rest of the business community hopes that it will be a peaceful process.

Mr Ireri further exuded confidence that HF would sustain its growth momentum going forward supported mainly by government policies such as those contained in the Finance Bill of 2010. Apart from being able to operate current accounts, mortgage companies can now source third party agents to sell its products across the country without having to put up physical buildings.

“We have started engaging with the Kenya Bankers Association (KBA) because it is our hope to be a member of the clearing house and thus become a member of KBA while still operating as mortgage finance company. That levels the playing field for us in terms of our ability to raise cheaper funds and pass on the benefits to our customers in low interest rates,” he further said.

As part of their strategies, the MD disclosed that they were also looking at setting up a Property Fund through which they can raise large amounts of equity from various players to invest in property development projects.

“We are currently exploring several options but we should be able to announce that confidently in the next four to eight weeks. Although we have the capability to raise Sh20 billion, we will not run ahead of trying to do so if we don’t have the projects or assets to put them into,” Mr Ireri added.

Shares

Latest Articles

Stock Market

Most Viewed