Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

HF profit on solid rock

NAIROBI, Kenya, Mar 2- Housing Finance has posted a 62 percent jump in its net profit recording Sh380 million in its 2010 full year up from Sh234 million.

The impressive result was backed by a 22 percent increase in net interest income, which stood at Sh1.4 billion buoyed by a 34.5 percent increase in the bank\’s loan book to Sh19.5 billion.

Briefing investors, Housing Finance Managing Director Frank Ireri said the mortgage financier\’s performance remained within the management\’s expectations.

"We expect the firm to continue its upward trajectory generating strong growth in earnings sustained by a robust demand for mortgages and affordable long term credit," Mr Ireri said.

During the year under review, customer deposits increased from Sh12.2 billion to Sh15.9 billion.

A successful infrastructure bond issue held in 2010 saw the firm\’s portfolio of borrowed funds increased by Sh7 billion to Sh8.6 billion.

Total operating income was up 20 percent to Sh1.7 billion compared to a lower increment in total operating expenses of 6.92 percent to Sh1.1 billion.

Housing Finance\’s assets stood at Sh18.2 billion while its core capital stood at Sh3.1 billion.

Mr Ireri said the country\’s housing deficit, especially in urban areas is not only a challenge to growing the economy, but also a source of opportunity t boost the construction industry, stimulating the economy\’s growth momentum.

Advertisement. Scroll to continue reading.

"We intend to continue with our involvement in the supply of residential houses for both the low and middle-income segment. This strategy will create significant mortgage lending opportunities for the company," he said.

Central bank statistics showed Kenya\’s mortgage debt was 2.4 percent of gross domestic product, and outstanding mortgages stood at Sh61.4 billion, up from Sh53.8 billion in 2009.

As part of its long-term strategy, Mr Ireri said the company was looking to tap into the sustained investment in infrastructure development to grow its business.

"In 2011 we will involve ourselves in large liquidating projects with high returns," he said.

To guide it in its quest towards playing a major role in large projects, Housing Finance will be partnering with financiers to fund such projects.

Housing Finance has already signed an agreement with the East African Development Bank and Shelter Afrique to co-finance large-scale projects of over Sh800 million.

The move is a welcome development for the company which is barred from lending more than 25 percent of its core capital base of Sh3 billion, which is Sh750 million.

Mr Ireri said the company was currently targeting developers, landowners, and construction material providers in a backward integration of the main mortgage business influencing property development and pricing to support its core business.

With the improved performance earnings per share hit Sh1.65 from the previous year\’s Sh1.02 with the board recommending a final dividend of Sh0.70 per share.

Advertisement. Scroll to continue reading.

Follow the author at https://twitter.com/MjKaranja

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...