Housing Finance Group posted a KSh158 million pretax loss in the first quarter of 2019, a huge drop from the Ksh53 million pretax profit booked in March 2018. The bank’s interest revenues dropped by 16 per cent to Ksh1.35 billion while non-interest revenues dropped by 9 per cent to KSh259 million.
Total expenses slightly declined by 4 per cent to Ksh1.8 billion.
The bank’s customer deposits shrunk from KSh36 billion to KSh34 billion in the 12 months between March 2018 and March 2019. Similarly, its loan book decreased from KSh49 billion to KSh42 billion. Despite a decline in the value of loans, bad loans increased by 51 per cent from KSh5.2 billion to KSh7.8 billion.
A slowdown in the real estate sector is partly to blame for the firm’s poor performance. A report by the Kenya Bankers Association indicates that house prices growth rate declined by the largest extent in the first quarter of 2019.
Housing Finance group intends to shift its focus from real estate financing to become a fully fledged banking institution. In December 2018, it appointed Robert Kibaara as the group’s CEO to help with the new strategy.
