[2008-05-29]  Housing Finance profit in 37p.c. dip
Housing Finance’s pre-tax profit for the first three months of the year fell 37 percent to KSh23.3 million from KSh37 million, during the same period last year. However, the mortgage lender’s total interest income went up 15 percent from KSh233.8 million to KSh268 million, mainly from interest on loans and advances totaling KSh233.1 million. The lender’s loans and advances to customers rose to KSh8.2 billion from KSh6.6 billion at the first quarter of 2007. Total non-performing loans and advances reduced from KSh1.7 billion during the first three months of 2007 to KSh1.3 billion for the period ended March 31, 2008. But, the company has fully provided for the non-performing loans. Customer deposits grew 19 percent to KSh9.4 billion from KSh7.9 billion last year. The company plans to offer 115 million new ordinary shares as rights to existing shareholders through the Nairobi Stock Exchange (NSE). The issue is scheduled to close on June 6, setting the stage for the official trading of the new shares on July 11. Through the rights issue, the bank hopes to raise an additional KSh2.3 billion to boost its balance sheet.

Allayed fears
Meanwhile the company has allayed fears of shareholders over its forthcoming rights issue and dwindling share price. The mortgage firm officials defended its share price at the Nairobi stock exchange saying that the downturn was mainly because of the Government’’s decision not to take up the rights issue. The share price has dropped from a one time high of KSh67 to Sh29 on Tuesday. HFCK director of business development, Kenneth Kinyua also said that the period for the offer was enough for the shareholders to take up the rights. “In the event of other difficulties we will consider an extension of the period. We are very flexible,” said Mr Kinyua during a shareholders briefing in Kisumu Wednesday. Mr Kinyua disclosed that the firm was anticipating an over subscription. He was responding to investors’ doubts over HFCK’s offer at a time of serious economic downturn in the country.

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