HF Group bounces back to profitability in 2022 – Capital Business – Nairobi Times

NAIROBI, Kenya, March 31 – HF Group has posted a net profit of Sh256.7 million for the full year ended December 31 2022, a major bounce back in earnings from a loss of Sh682.7 million posted in 2021.

The growth was fuelled by an improved performance by the Group’s banking subsidiary, HFC, whose profit after tax grew by 147 per cent to Sh178.2 million from a loss of Sh381.3 million in 2021.

Net interest income grew by Sh347 million to Sh2.16 billion while interest expenses increased marginally by 1 per cent equivalent to Sh15 million.

Interest-earning assets grew by Sh3.6 billion while the average yield on these assets improved year on year to 10 per cent from 9.6 per cent in December 2021.

Deposits grew by Sh1.5 billion during the period that was characterized by steep rise in interest rates.

“Our performance reflects the relentless focus we have put on our business transformation strategy. Our diversification to full service banking has seen the Group maintain a flat interest expense line while growing customer deposits and significantly increasing our funded and non – funded income,” said HF Group CEO, Robert Kibaara.

Despite a 13 per cent growth in staff costs to support new business segments, the Group’s total expenses dropped by Sh472 million (14 per cent) year-on-year highlighting the success of a cost optimization program.

“We continue to invest in people and technology, speeding our capacity building and digital transformation in order to enhance customer experience,” he said.

Foreign exchange income rose by 182 per cent underscoring the bank’s new focus on the SME market as the benefits of full-service banking continue to stream in.

The profit-making streak was recorded across all Group subsidiaries with the property development subsidiary revenue growing by Sh321 million supported by growth in project management fees and commissions.

The Group’s bancassurance subsidiary (HFBI) posted a 12 per cent growth in profit before tax to reach Sh47.5 million.

The Group CEO has exuded confidence in the sustained profitability across all business units driven by revenue diversification and the deepening of its full-service banking.

“As we embark on 2023, we have an optimistic outlook on our performance. Revenue diversification is expected to accelerate as the Group continues to roll out SME and Personal Banking offerings and project management initiatives, and this is expected to continue facilitating access to cheaper funding for the franchise,” Kibaara said.