HF Group Plc has continued to demonstrate the success of its transformation strategy with an impressive 105% surge in profit after tax to KES 483 million in Q3 2024. This remarkable performance comes as the Group nears the closing date of its KES 4.6 billion rights issue, marking a pivotal moment in its evolution from a single-product mortgage company to a comprehensive financial services powerhouse.
HF Group’s Financial Performance Key Metrics:
- Profit After Tax: More than doubled to KES 483 million, showcasing the success of the Group’s diversification strategy
- Total Interest Income: Demonstrated strong momentum with a 23% increase to KES 4.7B, driven by improved yields across lending portfolios
- Asset Base: Expanded significantly by KES 4.9 billion, reflecting growing market confidence
- Government Securities Portfolio: Recorded an impressive 33% growth in income (KES 273M), highlighting effective treasury management
- Net Interest Margin: Maintained a resilient 5.4% despite CBK rate increases from 10.5% to 12.75%
- Non-Funded Income: Achieved 11% year-on-year growth, now contributing 34% of total income – a testament to successful revenue diversification.
The Group’s digital-first approach has yielded remarkable results, with 80% of all transactions now flowing through digital channels. The success of this transformation is evident in the 45% growth in mobile banking user base and 35% year-on-year growth in digital loans. The Group has significantly enhanced customer experience through the HFC Whizz platform, enabling seamless banking services across multiple digital touchpoints.
HF Group Plc’s Strategic Rights Issue
The company kickstarted its rights issue on November 12th and it will be closing this offer to shareholders on the 9th of December 2024. Shareholders can subscribe to two new shares for every existing share at KES 4.00 per share. The initiative includes:
- Base offer of 1.15 billion new shares
- Greenshoe option of up to 346 million additional shares
- Strong backing from major shareholder Britam Group
The KES 4.6 billion capital raise will be strategically deployed with approximately 85% (KES 4.25B) directed towards expanding key business segments including mortgage business, personal banking, diaspora banking, and treasury operations. The remaining 15% (KES 750M) will be invested in enhancing digital infrastructure, focusing on digital marketplace development and improved data processing capabilities to ensure the Group maintains its competitive edge in digital banking solutions.
With its strengthened capital base, digital innovation focus, and demonstrated execution capability, HF Group appears well-positioned to capitalize on opportunities in Kenya’s dynamic banking sector. The rights issue represents a significant opportunity for investors to participate in this compelling growth story.
