HF Group has more than doubled its net profit for the year ended December 2025 to Sh1.42 billion from Sh524 million posted a year earlier on the back of increased lending to the government.
The mid-sized lender recorded a 17.7 percent growth in its deposit base to Sh55.8 billion, but its loan book grew at a slower pace, 5.7 percent, with the bulk of the savings invested in government securities.
The listed mortgage lender increased its investment in Treasury bills and bonds by 66.5 percent to Sh28.2 billion, which saw its interest earnings from the government securities rise 78.5 percent. HF earned Sh2.8 billion as interest from the government securities, up from Sh1.5 billion in the previous review period.
Besides interest income, the lender also booked Sh1.1 billion from trading of bonds captured under other income compared to Sh751 million reported under the same line a year earlier.
HF’s interest earned from loans and advances dropped 2.8 percent despite the expansion of its loan book to Sh41.1 billion from Sh38.8 billion, capturing the decline in interest rates last year.
Its stock of non-performing loans declined by 7.5 percent to Sh11 billion, being 19.7 percent of its loan book. The bank’s non-performing loans ratio is, however, higher than the industry average of 15.4 percent.
The decline in interest rates saw the lender’s interest expenses also decline 6.3 percent to Sh2.7 billion despite a 17.7 percent growth in customer savings.
Data from the Central Bank of Kenya had shown that HF enjoyed the largest lending margins, marking the highest profit potential among commercial banks.
HF had lending margins—the difference between interest paid for term deposits and lending rate—of 12.27 percent in December 2025. Despite the profit growth, the bank did not issue a dividend as it continues building up its capital position, which had been eroded by years of loss-making.
The growth follows a Sh5.99 billion cash call in 2024, with proceeds used to improve its capital position and allow it to push for more business.
HF’s improved financial performance has seen its share price rise 34.2 percent in the last year as investors look at having a pie of the real estate sector where HF plays a role as a mortgage lender.
The counter has attracted government insiders, including the leader of the majority in the National Assembly, Kimani Ichung’wah, and former chairman of the Kenya Revenue Authority, Anthony Mwaura.
