HF Group posts Ksh.256.7M full-year net profit

HF Group has posted a full-year net profit of Ksh.256.7 million, from a loss of Ksh. 682.7 million in December 2021, translating to a 939% growth.

The growth was fuelled by a stellar performance by the Group’s banking subsidiary, HFC, whose profit after tax grew by 560% to Ksh.178.2 million, rising from a loss of Ksh. 381.3 million recorded in a similar period in 2021.

Interest income grew by Ksh.347 million while interest expense increased marginally by 1%, the equivalent of Ksh.15 million.

Interest earning assets grew by Ksh.3.6 billion while the average yield on these assets improved year-on-year to 10% from 9.6% in December 2021.

Deposits grew by Ksh.1.5 billion during the period that was characterized by steep rise in interest rates.

“Our diversification to full service banking has seen the Group maintain a flat interest expense line while growing customer deposits and significantly increasing our funded and non–funded income,” said HF Group CEO Robert Kibaara.

Despite a 13% growth in staff costs to support new business segments, the Group’s total expenses dropped by Ksh.472million (14%) year-on-year highlighting the success of a cost optimization program implemented by the lender.

“We continue to invest in people and technology, speeding our capacity building and digital transformation in order to enhance customer experience.” Said the CEO.

Foreign exchange income rose by 182%, underscoring the bank’s new focus on the SME market as the benefits of full-service banking continue to stream in.

The profit-making streak was recorded across all HF Group subsidiaries with the property development subsidiary revenue growing by Ksh.321 million supported by growth in project management fees and commissions.

The Group’s bancassurance subsidiary (HFBI) likewise posted a 12% growth in profit before tax to reach Ksh.47.5 million.

Kibaara has exuded confidence of sustained profit making across all business units driven by revenue diversification and deepening of the lender's full-service banking.

“As we embark on 2023, we have an optimistic outlook on our performance. Revenue diversification is expected to accelerate as the Group continues to roll out SME and Personal Banking offerings and project management initiatives, and this is expected to continue facilitating access to cheaper funding for the franchise.” he said.