Lender Housing Finance released its third quarter 2017 results that saw Net Interest Income drop by 30% to KES2.18 billion.
Non-Interest Income decreased by 4% to KES 644.6 million versus KES 671.7 million in the previous period.
Total operating income declined by 25% over the period under review to KShs 2.82 billion down from KShs 3.77 billion recorded in 2016. Total operating expenses increased slightly by 1% on the back of increased operating costs. The Bank cited that it has initiated cost management measures that are expected to result in cost savings.
The bottom-line was hit massively with profits before tax dropping by 81% to KES 231.87 million in Q3 2017 compared to KES 1.2 billion in Q3 2016. The Bank’s Earnings per share came in at KES 0.81 vs KES 3.20 in the previous comparable period.
Housing Finance blamed the adverse results due to negative effects of the interest rate capping, unfavourable macroeconomic conditions and a prolonged electioneering period that impacted the financial sector.
Gross Non-performing loans increased during the period to KShs 8.1 billion from KShs 5.5 billion in 2016 due to slowdown in the property market and overall unfavourable macro-economic conditions.
The Group’s liquidity position improved to 26.03% in 2017 up from 23.04 % in a similar period in 2016 on account of an aggressive collections strategy. Total loan collections amounted to KShs 13.8b for the period to 30 September 2017.
The Group MD, Frank Ireri said that the Group performance is expected to pick up from Quarter 4 2017 when Komorock Heights and Richland projects are completed. He also explained that normalization of the property conveyance process at the Ministry of Lands Registries will benefit the Group by releasing funds tied in incomplete transactions as well as improve asset quality as financed projects are closed.
HF Group’s share price closed Monday’s session at KES 12.40. The 52 week trading range is KES 9.25 and KES 14.45 per share. The share price is down by 12.68% on a 1 year basis.
