HF Group has posted a KSh191 million net loss in the first quarter of 2021, a decline from the KSh633,000 net loss reported in the first quarter of 2020. The company’s main sources of revenue, interest income and non-interest income decreased sharply in the period under review.
Interest income from loans and advances, government securities, and deposits and placements with banking institutions decreased by 19% to KSh1.012 billion at the end of March 2021 from KSh1.245 billion in March 2020. The bank’s non-interest income declined by nearly half to KSh 135 million from KSh254 million in the corresponding period a year ago.
HF Group’s primary business is offering financial support to mortgage buyers. The company is also involved in real estate development, commercial banking, property finance, and insurance.
At the end of the first three months of this year, the bank’s customer deposits fell to KSH37.20 billion from KSh37.99 billion reported in the same period a year ago. Loans advanced to HF Group customers dipped by 7% to KSh35.77 billion in Q1 2021 compared to KSh38.4 billion in Q1 2020.
The lender is in the middle of a turnaround strategy that involves moving away from real estate as a core income stream, given the sectors’ performance which has left the company exposed to high defaults and Non-performing loans. The bank is also moving towards new channels of growth in retail and SME lending and strengthening its focus in personal, diaspora, and institutional banking.