Cash-strapped lender, Housing Finance has received Ksh.1 billion in new funding from one of its major shareholders in Britam Holdings to keep it afloat.
The tier II capital injection is geared at powering the banks as it seeks to accelerate lending to its SME and mortgages portfolio.
“The investment comes on the back of a turnaround strategy that is poised to see the business transform into a full service bank. This is indeed a major vote of confidence informed by the results already being witnessed through our business transformation initiatives.’’ said HF Group CEO Robert Kibaara.
“Our support will allow the bank to grow its full-service banking offering, deepen penetration of banking services and promote financial inclusion for all. This demonstrates our confidence in the transformation strategy of HF Group” added outgoing Britam CEO Benson Wairegi.
The new funding is viewed as integral to the lender’s new focus end user financing for affordable housing.
HF has for instance signed agreements with the national government on financing buyers of Ngara’s Park Road affordable housing project.
The new funding is further set to improve the bank’s core capital from the current Ksh.4.3 billion having been eroded by losses emanating from depleted income stream.
Housing Finance for instance saw its nine month losses to September expand by nearly eight times to ksh.730.2 million.
Britam holds an estimated 35.4 per cent stake in Housing Finance to include stakes by Britam Life Assurance Limited.
