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.
"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.
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