× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS

Kenya's HF Group warns of lower FY profit on declining interest income

By Reuters | November 30th 2018
Kenya Literature Bureau MD, Victor Lomaria and HFC MD, Sam Waweru sign a partnership agreement. [Photo: Courtesy]

NAIROBI  - Mortgage-focused lender HF Group Plc warned on Friday its 2018 net earnings would be 25 percent lower than the previous year, after posting a nine-month loss.

Declining interest income after a cut in the central bank rate led to lower lending rates, and higher non-performing loans weigh on its performance, the bank said in a statement.

The central bank cut its key lending rate to 9.00 percent in July from 9.50 percent, and has left it unchanged since then.

Kenya has had a cap on commercial lending rates — in place since late 2016 and set at 4 percentage points above the central bank rate.

“Further, the trading environment continued to be unfavourable, leading to a slowdown in the real estate sector credit growth,” the bank said.

 “The tough operating circumstances have led to an increase in the non-performing loans position, which has also adversely affected the business performance.”

The bank reported a pretax loss of 325.65 million shillings ($3.18 million) for the nine months to end-September, compared with a 231.87 million shilling profit a year earlier.

Net non-performing loans rose to 5.15 billion shillings from 5.12 billion shillings, while net interest income fell to 1.8 billion shillings from 2.18 billion shillings.

HF Group said a redundancy exercise it undertook during the period also increased its staff costs due to one-off payments to those laid off.

The bank said its liquidity ratio fell to 22.89 percent from 26.03 percent, against a statutory minimum of 20 percent.

Share this story
Twitters shares fall on fears of liberal bias
Shares of Twitter Inc tumbled on Thursday sparking fears of a backlash by conservatives protesting a perceived liberal bias by the company.
Dog walking becomes the newest hustle in town
Dog walking is now a status symbol. Owning a pet is cool. I nowadays meet lots of Kenyans and foreigners walking their dogs and some running.