HF Group PLC recorded a profit after tax of KSh 1.42 billion for the full year ended 31 December 2025, the highest in the institution's recorded history,
- •A deliberate shift into government securities and aggressive deposit repricing more than offset modest loan growth, completing a turnaround from cumulative losses of KSh 4.6 billion between 2018 and 2021.
- •Profit before tax reached KSh 1.61 billion, a 250% increase from KSh 460 million in 2024.
- •Total assets crossed KSh 82.40 billion, customer deposits grew 18.4% to KSh 56.90 billion, and core capital reached KSh 10.15 billion, prompting the Central Bank of Kenya to formally reclassify the banking subsidiary HFC as a Tier II institution in August 2025.
The dominant earnings driver was a 66% expansion in government securities holdings to KSh 28.27 billion, generating KSh 2.83 billion in investment income, up 79% year on year. The build-up, funded largely by deposit inflows rather than loan growth, reflects a deliberate treasury strategy that capitalized on elevated bond yields during the CBK easing cycle.
Net loans grew a comparatively modest 5.8% to KSh 41.11 billion, underscoring that the profit recovery was driven by asset reallocation rather than credit expansion.
- •The cost of funding fell simultaneously. with the weighted deposit rate declining from 6.30% to 4.90%, a 22% reduction, cutting total interest expense by KSh 593 million even as customer deposits grew 18.4% to KSh 56.90 billion. The combined effect pushed net interest income 63.8% higher to KSh 4.36 billion from KSh 2.66 billion, the single largest year-on-year NII gain in the group's recorded history.
- •Total operating expenses rose 25.5% to KSh 4.69 billion, with staff costs the primary driver, climbing 22% to KSh 2.31 billion. The cost to income ratio improved to 75.9% from 89.5%, a material 13.6 percentage point gain, though the ratio remains above the 60-65% range of well-run mid-tier Kenyan peers, indicating meaningful efficiency work ahead.
- •Core capital reached KSh 10.15 billion following the KSh 5.99 billion rights issue completed in 2024 that was oversubscribed by 38.3%, against a regulatory minimum of KSh 3 billion. The capital base prompted the CBK reclassification of HFC to Tier II in August 2025, the first time since the bank was downgraded in 2020 following the loss cycle. The liquidity ratio stood at 51.5%, well above the 20% regulatory floor.
Subsidiaries
- •HFDI, the property development arm, posted a profit before tax of KSh 340 million, collected KSh 3.5 billion across its portfolio and generated KSh 657 million from its Land Owners' Wealth Management business. The subsidiary also exited legacy development projects that had weighed on the group balance sheet.
- •HFBI, the bancassurance intermediary, recorded gross written premiums of KSh 787.5 million and a profit before tax of KSh 82 million, picking up three placements at the Think Business Insurance Awards 2025, including second place for customer centricity.
Earnings per share fell to KSh 0.75 from KSh 0.90 despite the PAT increase, the enlarged share count following the 2024 rights issue. Management has guided for group profit before tax of KSh 2.49 billion in 2026, implying 55% growth.
No dividend was declared, extending the payout drought to eight consecutive years.
