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The project is split into 7 phases of construction with each construction phase projected to take 18 months. A new phase will be launched every three months to ensure timely delivery of the project/FILE

Kenya

HF injects Sh3.7bn into banking subsidiary amid profit surge

The Group has also boosted the capital base of its banking subsidiary, Housing Finance Corporation (HFC) by Sh3.7 billion to Sh7.9 billion as it gears for its next phase of growth/FILE

The Group has also boosted the capital base of its banking subsidiary, Housing Finance Corporation (HFC) by Sh3.7 billion to Sh7.9 billion as it gears for its next phase of growth/FILE

NAIROBI, Kenya, Oct 27 – Housing Finance Group posted an after tax profit of Sh777.4 million up from Sh709 million in the third quarter of 2015, representing a 10 percent growth.

Loans and advances to customers increased to Sh51.7billion up from Sh43.2 billion posted during a similar period in 2014. Customer deposits increased to Sh37.5 billion up from Sh33.1 billion.

Commenting on the results, HF Group Managing Director Frank Ireri said the full service banking subsidiary plans to increase its customer base and support delivery of a broader range of products and services.

“Investments to support the banking strategy are expected to contribute positively to the profit trajectory of the group in the next financial year. HFC will roll out a campaign to increase its deposit base in the next financial year,” he said.

The group has also boosted the capital base of its banking subsidiary, Housing Finance Corporation (HFC) by Sh3.7 billion to Sh7.9 billion as it gears for its next phase of growth.

The integrated property and financial services provider injected the funds from the recent Rights Issue which raised Sh3.5 billion and from the current year profits.

Total non-interest income however dropped to Sh401.8 million down from Sh692.2 million.

The drop was as a result of a one off gain made from disposal of an equity investment in 2014.

Additionally, in the previous year there were sales of housing units by its development arm, HFDI but in the current year there is none.

“However, there are several housing projects which are expected to be completed by year end which will boost this income stream,” Ireri said.

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The projects expected to contribute to the income stream include Komarock 5B and K Mall.

The group has increased its retained earnings to Sh3.9 billion up from Sh2.5 billion. Gross non-performing loans decreased to Sh4 billion down from Sh4.3 billion.

HF Group is currently testing a new core banking system that is expected to improve efficiency and deliver new product offerings to customers.

In July, HF Group established HFC Limited to carry on the business of mortgage finance as well as banking services under the Banking Act.

HFC is targeting to grow its branch network to a maximum of 40 branches by 2018 in major cities, focusing on emerging property hotspots and near its developments.

The firm’s banking strategy currently entails opening branches in areas where the group is financing a major commercial or residential development.

HF Group’s property development subsidiary, HFDI has commenced development of phase one of Komarock Heights consisting of 480 apartments.

HFDI will in the fourth quarter of the year also embark on the construction of four housing projects in Nairobi that will consist of a total of 1,664 apartments and will commence a site and service scheme of l,030 plots.

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