HF Group records over Ksh 6M pretax loss

Written By: Regina Manyara
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HF Group records over Ksh 6M pretax loss
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The HF Group recorded a pretax loss of 642,744 Million shillings for the year ending 31st December 2018.

This drop in performance has been attributed to among others a slowdown in the real estate sector as well as an increase of non-performing loans which jumped to Ksh 8.7 billion from Ksh 5.2 billion during the period under review.

Shareholders, unfortunately, will not enjoy a dividend payout, this decision was informed by a recommendation by the board.

During the period under review, the group posted a significant increase in its total operating expenses to Ksh 4.2 billion up from Ksh 3.9 billion against total net income of Ksh 6.04 billion which was a decline from Ksh 7.1 billion recorded in the previous year.

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Mid 2018, the group embarked on organizational restructuring program in line with its recently launched digital banking strategy.

The process revolved around the merger, redundancy, and creation of new roles in a move that is poised to improve the financial services group’s responsiveness and operational efficiencies.

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.

Similarly, insider loans grew to Ksh 2.4 billion from Ksh 1.5 billion in the same period.

Owing to a slag in the real estate sector as well as slow private sector credit growth, the group has diversified into new segments; diaspora banking, SME banking, institutional banking, and personal banking.

The move is expected to reduce investment in real estate, which is capital intensive and requires long term funding.

The HF Group Plc board has not recommended a dividend payout.

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