HF Group has issued a profit warning for the year ended 31 December 2018, blaming the poor performance on downward revision of central bank rate, and increase in cost due to redundancy exercise that took place during the year.
Sam Waweru, the mortgage lender’s group managing director, says they expect full-year earnings for the year to fall below the 25 per cent than what was registered in 2017 financial results.
“The trading environment continued to be unfavorable, 
leading to a slowdown in the real estate sector growth. The tough operating circumstances have led to an increase in the non-performing loans position, which has also adversely affected the business performance,” he said.
He delivered the warning announcement as HF Group sunk deeper into loss territory after posting Ksh332 million loss after tax in the nine months ended September, compared to a Ksh159.7 million profit after recorded in 2017.
Total interest income fell by 14% to Sh 4.7 Billion as total non-interest income also fell by 7.2% to Sh 598 Million. Operating expenses, on the other hand, rose by 11.4% to Sh 2.4 Billion. Non-performing loans grew by 10.4% to Sh 8.9 Billion.
HF Group increased its investment in Government paper by a massive 429.5% to Sh 3.9 Billion as loans and advances to customers declined by 11% to Sh 45.4 Billion.
