INTERNATIONAL – Mortgage-focused lender HF Group Plc warned on Friday its 2018 net earnings would be 25 percent lower than the previous year, after posting a nine-month loss.
Declining interest income after a cut in the central bank rate led to lower lending rates, and higher non-performing loans weigh on its performance, the bank said in a statement.
The central bank cut its key lending rate to 9.00 percent in July from 9.50 percent, and has left it unchanged since then.
Kenya has had a cap on commercial lending rates — in place since late 2016 and set at 4 percentage points above the central bank rate.
“Further, the trading environment continued to be unfavourable, leading to a slowdown in the real estate sector credit growth,” the bank said.“The tough operating circumstances have led to an increase in the non-performing loans position, which has also adversely affected the business performance.”