(NAIROBI, KENYA) – HFCB Plc Group has reported a 59.9% increase in profit after tax for the half year period ended June, driven by higher earnings from lending and other banking activities.
The mid-tier lender’s net profit rose to KES 998.3 million (about $7.6 million / £6 million / €7 million) in the six months from KES 624.3 million (about $4.8 million / £3.7 million / €4.4 million) in the corresponding period last year.
The firm, whose shares are publicly traded on the Nairobi Securities Exchange, said net interest income increased 29.4% to KES 2.64 billion (about $20.1 million / £15.8 million / €18.5 million) from KES 2.04 billion (about $15.5 million / £12.2 million / €14.3 million), reflecting stronger earnings from loans and advances as well as investments in government securities.
Non-interest income grew 37.4% to KES 1.16 billion (about $8.8 million / £7 million / €8.1 million) from KES 844.3 million (about $6.4 million / £5.1 million / €5.9 million), giving the group a further boost as it widened its sources of revenue.
“We are building a more diversified and resilient earnings base that positions our business for sustainable growth,” HFCB Group Chief Executive Robert Kibaara said in a press statement.
Net loans and advances to customers grew 11.5% to KES 43.41 billion (about $331 million / £260 million / €304 million) from KES 38.94 billion (about $297 million / £233 million / €272 million), expanding the lender’s core earning assets.
Gross non-performing loans edged down 2.1% to KES 11.19 billion (about $85.2 million / £67 million / €78.2 million) from KES 11.43 billion (about $87 million / £68.5 million / €80 million), offering a modest improvement in the quality of the group’s loan book.
The group raised its loan loss provision by 30% to KES 273.9 million (about $2.1 million / £1.6 million / €1.9 million) from KES 210.6 million (about $1.6 million / £1.3 million / €1.5 million), signalling continued caution over potential credit losses.
Customer deposits increased 29.7% to KES 68.08 billion (about $519 million / £408 million / €476 million) from KES 52.50 billion (about $400 million / £314 million / €367 million), pointing to stronger mobilisation of customer funds during the period.
The results triggered an unusual trading halt at the Nairobi Securities Exchange after the bourse said it had received the financial report during market hours. HFCB Group published the results in the national newspapers on Friday morning, while the NSE circulated the group’s financial performance statement to investors after 11am.
The NSE, in a statement issued after 12.30pm, said it had halted trading in the shares for the day’s session following the release of the financial results during trading hours. The exchange said the suspension was intended to allow the market time to orderly disseminate and assimilate the new financial information.
The firm’s profit before tax climbed 74.2% to KES 1.22 billion (about $9.3 million / £7.3 million / €8.5 million) from KES 702.9 million (about $5.4 million / £4.2 million / €4.9 million), reflecting the widening gap between the group’s income growth and the increase in operating costs.
Total operating income rose 31.7% to KES 3.80 billion (about $28.9 million / £22.8 million / €26.6 million) from KES 2.89 billion (about $22 million / £17.3 million / €20.2 million), supported by higher interest income and faster growth in non-interest revenue.
Operating expenses rose 18.1% to KES 2.58 billion (about $19.7 million / £15.5 million / €18 million) from KES 2.18 billion (about $16.6 million / £13.1 million / €15.2 million), growing at a markedly slower pace than income and allowing a larger share of revenue to flow into profits.