HF Group's Rehani House head office along Kenyatta Avenue, Nairobi.[ photo / nation media]
The mortgage lender Housing Finance (HF) net profits for the first nine months of the year dipped 81 per cent as the non-performing loans expanded following the introduction of interest rate caps law.
In a report released yesterday by the lender, the total profit after tax dropped to Sh159.7 million during the nine months to September as compared to the Sh837 million it made in the similar period last year.
The report further indicates that the interest income from loans went down by 16.7 per cent to record Sh5.1 billion.
The firm's total non-performing loans rose by 47.3 per cent to record Sh8.1 billion in what it said was a “slowdown in the property market and overall unfavourable macro-economic conditions”.
The Bank's Chief executive Frank Ireri however expressed optimism in the lender's last quarter performance saying that they will be embarking on the cost management measures which they expect to cut the extra expenses.
Ireri added that the HF group will also benefit from the funds released from the pending transaction once the government finishes to normalises the property conveyance process at the Ministry of Land registries.
The real estate sector had been performing dismally following the introduction of the interest rate caps law on September last year and also prolonged electioneering period and political anxiety that had scared investors.
Last month the Kenya Bankers Association said that the housing prices in the third quarter of the year dropped the most in the last three years.