HF Group has delivered its strongest financial performance yet in years, posting a pre-tax profit of KES 1.61 billion for the financial year ended December 2025; a 250% year-on-year jump that cements the group’s transformation from a struggling mortgage lender into a diversified financial solutions provider.
HF Group’s FY 2025 numbers reflect the cumulative impact of a multi-year restructuring strategy: a broadened income base, improved deposit franchise, leaner cost structure, and a strengthened balance sheet that now comfortably exceeds regulatory capital thresholds.
The group’s inclusion in the MSCI Frontier Markets Small Cap Index in February 2025 added a layer of institutional visibility, and with the share price ending FY 2025 at KES 9.92, more than double the KES 4.51 close of FY 2024; market participants appear to be pricing in the improving fundamental story.
Also read: HF Group Posts Highest Profit Surge in Q3 2025, Shooting 265% to KES 1.14 Billion
“These results demonstrate that our transformation strategy continues to deliver strong and sustainable growth. We have strengthened our balance sheet, grown our deposit base, diversified our income streams, and improved operational efficiency across the Group.” – Robert Kibaara, HF Group CEO
The Turnaround Story
To appreciate the scale of the turnaround, consider where HF Group stood just four years ago. In FY 2021, the group posted a pre-tax loss of KES 1.0 billion with a cost-to-income ratio of 128%, meaning it was spending more than a shilling for every shilling it earned. By FY 2025, that ratio has been driven down to 69.3%, a structural improvement that has fundamentally changed the group’s earnings power.
The 48% surge in total operating income to KES 6.17 billion was the standout headline, and it was powered from multiple directions. Net interest income grew 64% to KES 4.36 billion, driven significantly by a 79% jump in income from government securities, which hit KES 2.83 billion. The elevated interest rate environment in Kenya through much of 2025 worked decisively in HF Group’s favour on the funded income side.
Non-funded income also held its own, growing 20% to KES 1.81 billion. Transaction fees, diversified service revenues, and increased customer activity contributed to a non-funded income share of 29% of total income, broadly consistent with the prior year but now on a much larger absolute base.
Operating expenses rose 27% to KES 4.3 billion, reflecting the cost of business expansion. However, because income grew nearly twice as fast, the group’s efficiency profile improved materially. The cost-to-income ratio fell to 69.3% from 80.8% in FY 2024 – a 1,150 basis point improvement in a single year.
Total assets grew 17% to KES 82.4 billion, reflecting increased customer confidence and improved market activity. Customer deposits were the headline balance sheet story, expanding 18% to KES 55.9 billion, a clear signal that HF Group’s efforts to broaden its deposit franchise are gaining traction.
The group also achieved a 130 basis point reduction in the cost of deposits year-on-year. Loans and advances to customers grew more modestly, reaching KES 41.1 billion, a 6% increase. This has had the effect of bringing the loan-to-deposit ratio down sharply to 74% from 82% in FY 2024, giving the balance sheet considerably more breathing room. Gross non-performing loans also declined slightly to KES 11.1 billion from KES 12.0 billion, an encouraging early sign of asset quality stabilization.
Capital and Liquidity: Ahead of the Curve
HF Group’s core capital has now surpassed KES 10 billion, enabling the group to meet revised regulatory capital requirements set by the Central Bank of Kenya, four years ahead of the 2029 deadline. The core capital to risk-weighted assets ratio stood at 21.8%, well above the regulatory floor.
The liquidity ratio closed at 51.5%, more than double the regulatory minimum of 20%. This positions the group with significant capacity to deploy capital into growth opportunities without running up against regulatory constraints.
2026 Outlook
HF Group’s FY 2025 results are unambiguously strong.
Management has signalled its next phase will focus on scaling digital platforms, expanding financial solutions offerings, and deepening customer relationships. With a clean balance sheet, strong capital ratios, and a cost base that is finally being outpaced by revenues, HF Group enters 2026 with more strategic optionality than it has had in years.
For a business that was loss-making four years ago, FY 2025 represents the vindication of a strategy that took time to bear fruit and raises the bar for what shareholders will expect in the years ahead.
