Kenya’s HF Group posts KSh327.9M Q1 2025 profit, up 2.2x, driven by rising income and transformation into a full-service bank beyond mortgage lending.
In a strong show of momentum, Kenya’s HF Group recorded a 2.2-fold rise in net profit for the quarter ending March 2025, posting KSh327.93 million ($2.5 million)—up from KSh150 million ($1.15 million) a year earlier. The gains were driven by a sharp increase in interest income and non-interest earnings, highlighting a successful pivot away from its traditional mortgage-only model.
“This performance reflects the progress we’ve made in transforming HF into a universal bank,” said HF Group CEO Robert Kibaara. “We’re growing our asset base and unlocking value across all business lines—retail, SME, and digital banking.”
Once known solely as a niche mortgage financier, HF Group (formerly Housing Finance) has undergone a steady evolution since 2019. The company has rebranded itself as a full-service financial institution, offering retail banking, SME lending, and digital products—responding to shifts in consumer behavior and economic realities.
In Q1 2025, HF posted:
- KSh1.72 billion ($13 million) in interest income
- KSh550 million ($4.2 million) in non-interest income (fees, commissions, trading gains)
This diversified revenue mix contrasts sharply with the group’s historical reliance on home loans.
The firm also improved its operating efficiency, with expense growth outpaced by income growth. Digital investments—such as a mobile lending platform for salaried workers and entrepreneurs—have contributed to scalable, tech-enabled cost management.
“The transformation journey we began in 2019 is now in full swing,” Kibaara noted.
“Our strong Q1 reflects strategic alignment, prudent lending, and digital-led efficiency.”
SMEs now account for nearly 30% of HF’s new lending—a signal of its expanding market footprint.
HF’s gains also reflect improving macroeconomic conditions in Kenya. After years of COVID-related stagnation, the economy is showing signs of life, with moderate growth in real estate, manufacturing, and construction.
“Banks like HF are riding a wave of cautious optimism,” said Mercy Kirima, a Nairobi-based banking analyst.
“Interest margins are widening, loan impairments are easing, and customer confidence is returning.”
Still, high interest rates and inflation remain a concern for borrower resilience, especially as Kenya’s 2025 fiscal policies evolve.
Looking forward, HF Group is focused on:
- Expanding affordable housing finance
- Deepening SME engagement
- Growing fee-based services for sustainability
- Exploring capital partnerships to scale lending
“Our next focus is on expanding affordable housing finance and deepening our SME reach,” Kibaara stated.
“The aim is sustainable, inclusive growth.”
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