Integrated financial solutions provider HF Group has posted a profit before tax of Sh1.14 billion, a 265 per cent increase compared to a similar period in 2024.
Profit after tax for the period under review was Sh988.7 million, compared to Sh483.5 million in the same period last year, a 104 per cent growth.
This performance comes on the back of a significant reduction in the cost of funds and an increase in interest income and non-funded income.
Management has pegged the strong performance to the Group’s diversification strategy, which is paying off, with all its subsidiaries registering growth in profitability.
HF Group CEO, Robert Kibaara, said: “The Group is on a growth trajectory and our business is growing strongly across all our three subsidiaries. Our diversification strategy is yielding results and the growth engines we have created over the last few years are now all scaling well.”
The Nairobi Securities Exchange firm saw its asset book grow by 22 per cent to Sh80 billion, while the total deposits grew by 20 per cent to Sh55 billion.
The group also registered a 52 per cent growth in operating income, 29 per cent growth in non-funded income, while net interest income grew by 63 per cent.
The liquidity ratio remained solid at 54.2 per cent, more than double the regulatory minimum, while the capital to risk-weighted assets ratio closed at 21.9 per cent, significantly above the required 10.5 per cent.
“We have a well-capitalised business and we are delivering value propositions that are relevant to customers. We will continue to invest in customer value propositions and digitization to increase opportunities for customers to self-serve. Further, we have reduced our base lending rate twice this year to support our customers,” said Kibaara.
The Group, which is celebrating its 60th anniversary, was earlier in the year added to the prestigious Morgan Stanley Frontier Markets Small Cap Index, which serves as a key performance indicator for investors tracking emerging markets.
Its banking subsidiary HFC was recently upgraded to a tier two bank, on the back of a growing market share and strengthened capital base.
Last year’s successful rights issue, oversubscribed by 38 per cent, has been instrumental in enhancing the capital position for HF Group.
The December rights issue saw shareholders offer the company Sh6.4 billion in the cash call, whose proceeds were to be used to buffer its capital levels ahead of new rules requiring banks to raise their core capital.
The lender had offered 1.153 billion shares in the issue seeking Sh4.6 billion, but received applications for 1.596 billion units.
HF Group commenced operations in November 1965 and has diversified from being a mortgage financier to a provider of integrated financial solutions with interests in banking, property and insurance.
The company restructured its business and rebranded in August 2015, transforming from the single entity–Housing Finance, to the non-operating holding company, HF Group, with four subsidiaries including HFC, HFDI, HF Bancassurance Intermediary (HFBI), and HF Foundation.
The mortgage firm began the year with a share price of Sh4.51 and has since gained 122 per cent on that price valuation, ranking it 10th on the NSE in terms of year-to-date performance. Experts say that investors should expect even more tidings on the good results.
It is currently the eighth most traded stock on the Nairobi bourse over the past three months. It has traded a total volume of 73.8 million shares—in 7,777 deals—valued at Sh789 million over the period, with an average of 1.17 million traded shares per session.
by MARTIN MWITA
