Mortgage lender HF Group Plc has widened its Net losses to KSh 730.2 Million in Q3, 2020 from a loss of KSh 84.6 Million, triggering the firm to issue a profit alert.
The lender joins a list of firms that have made a profit warning, the latest one being Britam. Others are Unga Group, Kenya Airways, Kenya Orchards and Kenya Power.
Its pre-tax losses also widened to KSh 671.7 Million from KSh 81.4 Million.
“HF Group Plc projects that the net earnings for the year ended 31st December 2020 are expected to be substantially lower compared to the earnings reported for the same period in 2019. This is based on the un-audited results for the period to 30th September 2020, factoring in forecasts to the end of the year, and the preliminary evaluation made by the Board, with reference to figures and information currently available,” said Robert Kibaara – HF Group CEO.
HF Group net loans to customers fell to KSh 37.6 Billion in Q3, 2020, from KSh 39.2 Billion in the nine months ended 30th September 2019.
The lender’s cash balances at the end of Q3, 2020 edged up marginally from KSh 412.1 Million to KSh 499.2 Million during the period under consideration.
The lender’s balance sheet size shrunk to KSh 55.1 Billion from the previous KSh 57.4 Million as its loans to customers, a vital component of the asset book shrunk.
Customers’ deposits was down to KSh 34.6 Billion from KSh 38 Billion as the COVID-19 pandemic hit the number of mortgage accounts.
Total Shareholders’ funds also declined to KSh 9.6 Billion from KSh 10.4 Billion while the size of non-performing loans rose from KSh 11.2 Billion to KSh 12.6 Billion.
HF Group’s Core Capital-which is the minimum amount of capital that a bank, must have on hand to comply with Central Bank of Kenya (CBK) regulations, shrunk to KSh 4.3 Billion in Q3, 2020 from KSh 6.7 Billion in Q3, 2019.
Earnings per Share (EPS) went into negative territory from (KSh-0.29) to KSh-2.53 as HF soaks more losses in Q3, 2020.
HF Group increased its provisions for loan losses from KSh 441.2 Million to KSh 587.5 Million.
