BACK TO DRAWING BOOK

HF Group to embrace diversity to ride back to profitability

In Summary

• The mortgage firm made a loss of  Sh651.6 million in 2018.

• Disbursed over 1,000 loans per day on digital transformation.

HF Group CEO Robert Kibaara (centre) engages property selling agents during the launch of the Shika Nyumba na HF in Nairobi.
HF Group CEO Robert Kibaara (centre) engages property selling agents during the launch of the Shika Nyumba na HF in Nairobi.

HF Group has rolled out an aggressive business transformation strategy to turn around performance and accelerate growth to profitability by end of 2019.

This is after the mortgage company recorded a loss of Sh651.6 million for the year ended December 31, 2018 compared to a profit of Sh334.3 million in 2017.

HF Bank on the other hand recorded a loss of Sh395.2 million during the period under review down from a profit of Sh392.9 million the previous year.

The poor performance is attributed to slow activities in the real estate sector last.

On Thursday, CBK governor Patrick Njoroge said slow uptake of buildings saw real estate contribute Sh6 billion to non-performing loans that went up by Sh19 billion.

HF Group chief executive Robert Kibaara said the business is taking advantage of emerging opportunities in the market to build a digital bank through its digital financial services unit. 

"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," Kibaara said.

He said the strategy is anchored on four structural service areas – building a digital bank, expansion into new banking segments and maintaining dominance in mortgage finance.

The lender has so far acquired 550,000 new customers, reflecting a 600 per cent growth; disbursed over 1,000 loans per day and registered transactions in excess of Sh2.5 billion.