HF Group first quarter profit more than doubles to Sh327 million

Local lender HF Group more than doubled its first quarter 2025 profit before tax to reach Sh327 million, up from Sh150 million last year.

The group’s total income rose by 33 per cent to Sh1.41 billion in the three months to March 31, up from Sh1.06 billion in the same period last year.

The growth was driven by a 46 per cent increase in net interest income and a notable contribution from non-funded income, which accounted for 30 per cent of total revenues.

Key drivers included increased earnings from fees and commissions, custodial services and income from the Group’s property and insurance subsidiaries.

HF Group chief executive Robert Kibaara, while releasing the results, attributed the strong performance to the group’s ongoing transformation and diversification strategy, highlighting growth in business banking, property and custodial services.

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“We continue to realise the impact of our transformation journey. Our business model has evolved significantly, enabling us to deliver sustainable growth and value to our shareholders.

"Further, the successful rights issue, which was oversubscribed by 38 per cent, has enhanced our capital position, allowing us to power growth as we innovate to meet customer needs,” he said.

The group’s total deposits rose by 16 per cent to Sh51 billion, reflecting strong market confidence following the recent rights issue.

The balance sheet grew by 18 per cent to Sh73.4 billion, while the liquidity ratio remained solid at 45.1 per cent, more than double the regulatory minimum.

The core capital to risk-weighted assets ratio closed at 21.3 per cent, significantly above the required 10.5 per cent, underscoring the group’s strong capital base and capacity for future growth.

Operating expenses increased by 19.1 per cent to Sh1.08 billion, attributed to strategic investments in talent acquisition and digital infrastructure.

Meanwhile, provisions for expected credit losses declined by eight per cent, reflecting effective management of non-performing loans and an improved collections framework.