HF Group recovered strongly from a loss to post a full-year net profit of Sh256.7 million for the period ended December 31, 2022.
The lender posted a loss of Sh682.7 million in December 2021.This represents a 138 per cent growth on the back of an aggressive business transformation strategy.
The growth was fuelled by a stellar performance by the Group’s banking subsidiary, HFC, whose profit after tax grew by 147 per cent to Sh178.2 million rising from a loss of Sh381.3 million in December 2021.
Interest income grew by Sh347 million while interest expense increased marginally by a percentage equivalent of Sh15 million.
Interest-earning assets grew by Sh3.6 billion while the average yield on these assets improved year on year to 10 percent from 9.6 per cent the previous year.
Deposits grew by Sh1.5 billion during the period which was characterized by a steep rise in interest rates.
"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.
He added that 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 optimisation 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 percent growth in profit before tax to reach Sh47.5 million.
The Group CEO has exuded confidence in sustained profit-making 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,” Kibaara said.
