http://www.capitalfm.co....ong-2013-first-quarter/

Housing Finance has posted a net profit of Sh195 million in the first quarter of 2013, up from Sh133 million in the same period last year, representing a 46 percent increase.


Net loans and advances to customers increased 20 percent to Sh31.6 billion up from Sh26.4 billion.

Ngai!who was taking loans at that political climax.this is our year to eat.thanks i stay put.

This is the new Equity. Buy by the bucket loads if you have the cash. It will be a loooong time before we see 20 and below on this counter.

The diamond is finally out of the rough. Profit Before Tax up 46.60% y/y

The stellar performance is courtesy of the core banking business of lending. Net interest income is up 45.73% y/y (+12.71% q/q) benefiting from the lower interest rate regime which has enabled the bank to net higher interest income (+16.66% y/y, +0.58% q/q) while interest expense is down (-2.08% y/y, -8.83% q/q). Non interest income have also impressed by coming higher by 21.49% y/y. However, staff cost is a headache having surged 29.68% y/y (21.85% q/q) and other operating expenses (whatever this are ) continue to sting {up 66.64% y/y, 109.65% q/q). ...

.... The Balance Sheet too looks impressive

Loans and advances to customers have grown 19.77% y/y. Notice the growth in loan book started in Q3 2012 and this should keep going especially this year that the environment is good-looking. I fully understand and support their call for funds to keep the growth ON. Customer deposits are up 30.99% y/y and they also got substantial deposit in Q1 2013 which have contributed to the lower interest paid. The recently introduced current accounts are beginning to pay off and should continue to pay off with the expansion of the bank via new branches, agents and other customer delivery platform. …. The bank however needs to put Non Performing Loans (NPL) in check. They are up 79.17% y/y. Gross NPL/Loans ratio has increased to 8.5% from the 7.7% (Dec 2012), 6.9% (Sept 2012) and 5.7% (Jan - June 2012)

Will give this counter a week to see if it can shrug off NSE's buy weakeness period. If it does slip back to 20 that will be a welcome discount. Missed it while chasing kengen divs last Dec & still pinching myself for that mistake. Otherwise a good performance for Q1.

@Cde, the Q1 2013 performance is stellar. If the momentum set in this quarter keeps on, HFCK will deliver very honourable performance in FY 2013. The thing I note with your view is that you are comparing Q4 2012 with Q1 2013 which is resulting to the incorrect picture you have. Historically and without fail, banks Q4 have outperformed by substantial margin all other quarters in the year. See below quarterly PBT statistics for HFCK and notice the huge spike in PBT during Q4 (This observation also applies to all other banks)

Q1 2012 - KES 190,935
Q2 2012 - KES 166,646
Q3 2012 - KES 206,060
Q4 2012 - KES 343,990
Q1 2013 - KES 279,909

mwekezaji, though that is usually true, I had indicated in an earlier thread (I think the Equity vs KCB one) that KCB failed to live up to many people's expectations as their Q4's came in lower as opposed to the 'traditional' Q4 surge:

Q1 2,647,517
Q2 5,856,291
Q3 4,506,586
Q4 4,197,749

So exceptions are always there...

HFCK is going to get competition from Co-op bank which is now entering the mortgage market with interest rates cheaper than HFCK.
Alos Barclays is getting back to mortgage business which it had scaled down over the past few years.
Both are doing similar models like HFCK i.e financing construction and also buyers at cheaper rates than HFCK

The management is optimistic about 2013. And rightly so (ceteris paribus) as 1Q 2013 would have been muted with the elections being a damper especially in the 'sensitive' areas. I expect construction in RV should pick up to account for increased economic activity.

The KBS profits should roll in later (4Q 2013) but it sets the stage for a stronger 2014.

At the current pace, it is likely HFCK can achieve a 4 EPS thus the current price of 26 seems 'cheap'... relative to other counters & banks.