Housing Finance Group has reported a pretax loss of Ksh 642,744 Million for the year ending 31st December 2018 hard-hit by a slowdown in the real estate sector and an increase of non-performing loans (NPLs).
The mortgage provider said its NPLs rose to Ksh 8.7 billion from Ksh 5.2 billion during the period under review.
Its total operating expenses increased to Ksh 4.2 billion up from Ksh 3.9 billion against total net income of Ksh 6.04 billion which declined from Ksh 7.1 billion recorded in the previous year.
During the period under review, the group recorded an increase in non-performing loans from Ksh 5.2 billion in 2017 to Ksh 8.7 billion in 2018. Insider loans grew to Ksh 2.4 billion from Ksh 1.5 billion in the same period.
HF Group chief executive Robert Kibaara said “As part of our full banking service transformation, we have diversified into new segments; diaspora banking, SME banking, institutional banking and personal banking. This expansion is informed by the need to reduce the concentration in real estate, which is capital intensive and requires long term funding.”
Some of the strategic initiatives the Group projects will drive profitability in future include continued focus investment in digital channels to enhance accessibility, focus on customer service and experience excellence, deepening of the full-service banking value proposition, aggressive collections on the non-performing loans and scaling up on the provision of affordable and decent housing.
No dividend was recommended to the shareholders.