HF Group Q3 Profit Surges by 105% Amidst Rights Issue

HF Group Plc has reported its financial results for the third quarter of 2024, posting a 105% year-on-year growth in profit after tax to KES 483 million, up from KES 236 million in the previous period. The profit surge comes as the Group embarks on a KES 6 billion rights issue aimed at fortifying its capital base and expanding its product portfolio.

Key Financial Highlights

•After Tax Profit: Increased by 105% to KES 483 million, reflecting strong operational performance.
•Non-Funded Income (NFI): Grew by 11% year-on-year to KES 1.0 Billion on diversified revenue streams.
•Total Interest Income: Rose by 23% year-on-year to 4.7B, driven by higher yields on loans and government securities.
•Total Assets: Expanded by KES 4.9 billion.
•Customer Deposits: Increased by KES 1.2 billion year-on-year.
•Interest Income on Government Securities: Jumped 33%, adding KES 273 million to the Group’s top line.
•Net Interest Margin: Remained stable at 5.4% despite a challenging high-interest-rate environment.

Additionally, HF Group has intensified efforts to improve asset quality, achieving non-performing loan (NPL) collections of KES 600 million year-to-date, with a further KES 3 billion targeted by year-end.

Rights Issue

The rights issue, which opened on 13th November 2024 and closes on 9th December 2024, seeks to raise KES 6 billion through the issuance of 1.5 billion new ordinary shares. Shareholders will have the opportunity to purchase two new shares for every one held, with a greenshoe option for additional shares.

Proceeds from the rights issue will go towards:

•Expanding Product Offerings: The Group is keen to grow its retail and corporate banking products.
•Strengthening Technology Platforms: Investments in technology aim to enhance customer experience and operational efficiency.
•Positioning for Growth: The capital injection will enable the Group to scale its operations across its business segments, including mortgage lending, bancassurance, and property development.

Britam Group, HF Group’s major shareholder, has confirmed full participation in the rights issue, alongside commitments from other principal shareholders, reflecting strong support for the initiative.

Listed on the Nairobi Securities Exchange since 1992 under the ticker symbol HFCK, HF Group remains a leading financial services provider with a rich history in mortgage lending and banking.