HF Group’s has narrowed its losses by 99.6 percent to Sh633,000 in the first quarter ended March compared to Sh158.2 million last year, on reduced operating expenses.
The lender said its strategy of exiting the home construction business and focusing solely on mainstream banking seems to have started paying off.
Its operating expenses dropped 10.7 percent to Sh 827.1 million, partly due to provisioning for bad debt falling 23.4 percent to Sh137.6 million.
This partly justified its move from a high-risk and unpredictable mortgage financing business to mainstream banking.
Non-performing loans on the other hand dropped 5.7 percent to Sh12.2 billion, with the company saying the results did not take into account the economic impact of the Covid-19 pandemic.
“Due to the short period of the pandemic in Kenya prior to the reporting date, there was insufficient data to analyse the impact of the virus. As a result, the financial statements for the period to March 31, 2020, have not been adjusted with the Covid-19 impact,” said the lender in a statement.
The Nairobi Securities Exchange-listed firm had earlier in the year shifted its strategy to move away from the mortgage business with the aim of freeing up substantial resources that had been tied up in its property development subsidiary HF Development and Investment Limited (HFDI).