HF Group’s strategy of exiting the home construction business and focusing solely on mainstream banking seems to have started paying off, as the lender has registered an improvement in its Q1 2020 results.
At a time when tier 1 banks have reported a dip in quarter one profits, Housing Finance has massively narrowed its losses by 99.6 percent to Ksh633,000 for the first quarter ended March 2020, compared to Ksh158.7 million the same period last year.
Operating expenses dropped 10.7 percent to Sh827.1 million, partly due to provisioning for bad debt falling 23.4 percent to Sh137.6 million. This partly justified its move from a high-risk and unpredictable mortgage financing business to mainstream banking.
Non-performing loans on the other hand dropped 5.7 percent to Sh12.2 billion, with the company saying the results did not take into account the economic impact of the Covid-19 pandemic.
The Nairobi Securities Exchange-listed firm had earlier in the year shifted its strategy to move away from the mortgage business with the aim of freeing up substantial resources that had been tied up in its property development subsidiary HF Development and Investment Limited (HFDI).
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