HF Group has recorded a net profit of Kes256.7 million for the full year ended December 31 2022, a bounce back in earnings from a loss of Kes 682.7 million posted in 2021.
The growth is attributable to the Group's banking unit, HFC, which has improved its performance. In 2022, HFC's profit after tax increased by 147% to Kes178.2 million from a loss of Kes381.3 million.
While interest expenses climbed slightly by 1%, or Kes15 million, net interest income jumped by Kes347 million to Kes2.16 billion.
Interest-earning assets increased by Kes3.6 billion, and their average return increased from 9.6 per cent in December 2021 to 10% this year.
Deposits increased by Kes1.5 billion during the time that saw a sharp increase in interest rates.
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HF Group CEO, Robert Kibaara noted that the performance reflects the relentless focus the Group has put into their business transformation strategy.
“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,”
The Group's total expenses decreased by Kes472 million (14%) year over year, despite a 13% increase in staff costs to support new business sectors, demonstrating the achievement of a cost optimisation effort.
“We continue to invest in people and technology, speeding our capacity building and digital transformation in order to enhance customer experience,” he said.
While the advantages of full-service banking continue to flow in, the bank's new focus on the SME sector is highlighted by a rise in foreign currency income of 182%.
All Group subsidiaries recorded profits, with the property development subsidiary's income increasing by Kes321 million thanks to an increase in project management fees and commissions.
The bancassurance division of the Group (HFBI) reported a 12% increase in earnings before tax to reach Kes47.5 million.
As a result of revenue diversification and the expansion of its full-service banking, the Group CEO has exuded confidence in the continued profitability across all business areas.
