Housing Finance Company of Kenya

Housing Finance Company of Kenya, commonly known as Housing Finance or HFC, is a Kenyan commercial bank with a longstanding specialization in mortgage finance. The institution was created in November 1965, shortly after Kenya's independence, with the broad social and economic objective of encouraging saving and expanding access to home ownership. Over time, it developed from a housing-finance institution into a regulated banking business offering mortgage lending, savings, current accounts and related financial services. The company occupies a distinctive position in Kenya's financial sector because its identity remains closely associated with housing finance even though its operating scope extends beyond mortgages. It has served individuals and households seeking funds to purchase, build or improve residential property, while also maintaining a branch network across Nairobi and a number of regional Kenyan towns and cities. The institution's historical business has therefore combined long-term property lending with deposit-taking and conventional banking activities. Its ownership history has included substantial participation by the Commonwealth Development Corporation and the Government of Kenya. The Commonwealth Development Corporation's interest was at one point reported to have reached 60 percent, while the government at one time held 50 percent. Both investors later reduced or exited their positions. Housing Finance became a publicly traded business in 1992 when its holding company's shares were listed on the Nairobi Stock Exchange, now the Nairobi Securities Exchange, under the symbol HFCK. The organization adopted the shorter operating name Housing Finance Limited in 2002. In 2010, the Central Bank of Kenya authorized the business to issue and operate current accounts, expanding its banking capabilities beyond its earlier savings-account authorization. A major structural reorganization began in December 2014. The banking and mortgage-finance operations were transferred to a newly incorporated wholly owned subsidiary called HFC Limited, while the former operating company changed its name to HF Group Limited and became a non-operating holding company. This arrangement was designed to align the group's structure with Kenyan banking legislation and Central Bank prudential requirements. Housing Finance's shareholder and competitive history has included investments by Equity Group Holdings and British-American Investments Company, commonly known as Britam. In 2014, Britam announced a transaction to acquire Equity Group Holdings' 24.76 percent interest in the mortgage financier, increasing Britam's holding to 46.08 percent at the time and ending Equity's seven-year investment. The subsequent group structure placed HFC Limited as the banking and mortgage subsidiary of HF Group Limited. The company has been described as one of Kenya's largest mortgage lenders. At December 2019, it was reported to be the country's second-largest mortgage lender, with KSh33.7 billion in mortgage loans, behind Kenya Commercial Bank's KSh64.3 billion. In December 2020, reported total assets were KSh55.445 billion and shareholders' equity was KSh8.562 billion. These figures are historical snapshots rather than current financial measures. The brand's positioning is built around specialist housing expertise supported by regulated commercial-banking capabilities. Its customer proposition has traditionally focused on helping Kenyan households accumulate savings, obtain home loans and manage related banking needs. The institution remains associated with Housing Finance Group Limited and operates within the regulatory framework of the Central Bank of Kenya.

Housing Finance Company of Kenya was established in November 1965 to encourage saving and promote home ownership in newly independent Kenya. Its original identity was closely tied to the provision of housing finance, particularly long-term lending for residential property. The institution later expanded into deposit-taking and commercial banking while retaining mortgage finance as its defining specialization. The company's early ownership included major institutional and public-sector investors. The Commonwealth Development Corporation at one point held as much as 60 percent, while the Government of Kenya was reported to have held 50 percent at one stage. These interests were subsequently reduced as the company developed into a more broadly owned financial institution. In 1992, the holding company's shares were listed on the Nairobi Stock Exchange under the symbol HFCK. The listing gave Housing Finance a place among Kenya's publicly traded financial businesses and created a market for its shares. In 2002, the operating institution adopted the shorter name Housing Finance Limited, although the longer Housing Finance Company of Kenya name continued to identify the business in public references. The institution's banking permissions expanded over time. It had previously been authorized to provide savings accounts, and in 2010 the Central Bank of Kenya authorized it to issue and operate current accounts. This reflected the company's evolution from a specialist mortgage institution toward a commercial bank capable of serving wider day-to-day banking needs. Ownership and strategic changes became particularly significant in 2014. On 30 June of that year, British-American Investments Company served the board with a takeover notice concerning Equity Group Holdings' 24.76 percent shareholding. Completion of the transaction increased Britam's reported interest in Housing Finance to 46.08 percent and ended Equity Group Holdings' seven-year investment in the company. In December 2014, Housing Finance commenced a group restructuring. A new wholly owned subsidiary, HFC Limited, was incorporated, and the banking and mortgage-finance business was transferred into that subsidiary. The former operating company changed its name to HF Group Limited and became a non-operating holding company. The restructuring was intended to comply with the Central Bank of Kenya's interpretation of the Banking Act and its prudential guidelines. Under the resulting arrangement, HFC Limited became the banking and mortgage subsidiary while HF Group Limited remained the listed parent. Housing Finance has maintained a branch presence in Nairobi and other parts of Kenya, including Mombasa, Nakuru, Nyeri, Eldoret, Kisumu, Thika, Meru, Kitengela, Ongata Rongai, Embu, Nanyuki, Naivasha and Machakos. The network has supported the company's combination of mortgage origination, savings collection and general banking services. The company has been recognized as a major participant in Kenya's mortgage market. At the end of 2019, it was described as the country's second-largest mortgage lender, with KSh33.7 billion in mortgage loans, compared with KSh64.3 billion reported for Kenya Commercial Bank. At December 2020, the company was reported to have total assets of KSh55.445 billion and shareholders' equity of KSh8.562 billion. These historical figures illustrate the scale of the institution but should not be treated as current results. Today, Housing Finance Company of Kenya is best understood as the operating banking and mortgage-finance business associated with Housing Finance Group Limited. Its brand equity rests on more than five decades of housing-finance experience, while its regulated commercial-bank platform allows it to offer products beyond mortgages.

• 2014

  Ownership transaction involving Britam

  [1]Housing Finance Company of Kenyaen.wikipedia.org

  Britam announced the acquisition of Equity Group Holdings' 24.76 percent stake, increasing its reported interest to 46.08 percent.

• 2014

  Operating-company restructuring

  [1]Housing Finance Company of Kenyaen.wikipedia.org

  The banking and mortgage business was transferred to HFC Limited, while the former operating company became HF Group Limited, a non-operating holding company.

• 2010

  Current-account authorization

  [1]Housing Finance Company of Kenyaen.wikipedia.org

  The Central Bank of Kenya authorized Housing Finance to operate current accounts.

• 2002

  Shorter operating name adopted

  [1]Housing Finance Company of Kenyaen.wikipedia.org

  The institution adopted the name Housing Finance Limited.

• 1992

  Holding company listed

  [1]Housing Finance Company of Kenyaen.wikipedia.org

  The holding company's shares were listed on the Nairobi Stock Exchange under the HFCK symbol.

• 1965

  Institution established

  [1]Housing Finance Company of Kenyaen.wikipedia.org

  Housing Finance Company of Kenya was established in November to encourage savings and expand home ownership in Kenya.

A Kenyan commercial bank differentiated by its heritage and specialization in mortgage lending and housing finance.

• Mortgage finance

  Residential mortgage loans

  Mortgage lending is the company's signature business and the primary basis of its market identity. Housing Finance has historically served Kenyan customers seeking financing for residential property and home ownership. The mortgage portfolio has made the institution one of the notable lenders in Kenya's housing-finance market.

• Retail banking

  Savings accounts

  Savings products support the company's original mission of building a savings culture and helping households prepare for home ownership. Savings-account authorization preceded the institution's later approval to operate current accounts.

• Retail banking · 2010

  Current accounts

  Current-account services broadened Housing Finance's proposition beyond specialist mortgage lending. The Central Bank of Kenya authorized the institution to issue and operate current accounts in 2010.

• Housing finance

  Home construction and improvement finance

  The company's housing-finance scope includes lending associated with residential property needs, including the construction or improvement of homes. These activities extend its role from property purchase finance to broader household housing requirements.

• 2014

  Creation of a separate banking subsidiaryStrategy

  Background

  The group's banking and mortgage-finance operations needed to be organized within a structure consistent with the Kenyan Banking Act and Central Bank prudential guidelines.

  Action taken

  Housing Finance incorporated HFC Limited, transferred the banking and mortgage business to it, changed the former operating company's name to HF Group Limited and made that company a non-operating holding company.

  Aftermath

  HFC Limited became the group's operating banking and mortgage subsidiary, while HF Group Limited continued as the listed holding company.

  Source

• 2014

  Britam stake acquisitionM&A

  Background

  Equity Group Holdings held a 24.76 percent interest in Housing Finance, and British-American Investments Company was seeking to increase its position.

  Action taken

  Britam served the board with a takeover notice to acquire Equity Group Holdings' stake, reportedly raising Britam's holding to 46.08 percent after completion.

  Aftermath

  Equity Group Holdings ended its seven-year investment in Housing Finance.

  Source

1. 1Housing Finance Company of Kenyaen.wikipedia.org