Mortgage lender HF Group records records a 77% profit decline, seeks growth through leveraging digital channels

Mortgage lender HF Group has today announced pretax profit of Shs 311 million for the year ending December 31st 2017 down from Shs 1.3 billion in 2016 representing a decline of 77%.

The company had in January this year issued a warning regarding a possible decline in its profit for the period ending December 31st 2017 citing weaker earnings on slow property transactions, and the capping of interest rate.

Commenting on the results, the Group’s Managing Director, Frank Ireri said; “The pressure occasioned by the operating environment provided an opportunity to bolster fundamental business initiatives that are key to our operating efficiencies and sustainable growth.’’

Total operating income declined by 7.8% for the period under review, to Shs 4.32 billion down from Shs 4.69 billion recorded in 2016.  Total operating expenses increased by 19% on the back of increased operating costs occasioned by investment in alternative channels.

Gross Non-performing loans increased during the period to Shs 8.2 billion from Shs 6.2 billion in 2016. The company attributed this decline to slowdown in the property market and unfavourable macro-economic conditions.

The Group’s Total Assets declined by 6% to Shs 67.5 billion, down from Shs 71.9 billion during a similar period in 2016.

The group announced that it had changed strategy based on the market outlook and it has now shifted focus to growth through leveraging digital channels, an initiative that is poised to attract returns on investments in the next 18-24 months.

It has also up-scaled full-service banking proposition targeting SMEs and retail customers and refocused on service delivery and customer experience, which has seen the introduction of a 24-hour call centre and enhanced operational efficiencies. 

It also announced that its property development subsidiary HFDI, launched Clay City a joint venture project comprising of 1,520 units and a commercial Centre, whose construction will be done in four phases. HFDI has fully operationalized K-Mall and also commenced on the handing over of the Komarock Heights phase one, consisting of 480 apartments.

The group also announced that it was able to attract financing of approximately shs. 5 billion from European Investment Bank and Ghana International Bank. In addition, on 2 October 2017, the Group through its banking subsidiary, HFC successfully paid the first tranche of the Shs 10 billion corporate bond issued in 2010 amounting to Shs 7 billion.

The Board of Directors recommended to the shareholders, the payment of a final dividend for the year of Shs 0.35 for every ordinary Share of sh. 5.00. It also recommended the issuance of bonus share of one (1) of such new fully paid ordinary share for every ten (10) of existing ordinary share of par value Kshs.5.00.

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