* Pretax profit leaps to 1.48 bln shillings
* Non-interest income up 382 pct
* Sees successful Eurobond driving rates lower
By Duncan Miriri
NAIROBI, Feb 19 Kenya's second-largest mortgage
lender, Housing Finance Ltd, will issue a medium-term
note to take advantage of potentially lower rates once the east
African nation has sold its debut Eurobond, it chief executive
The company, which posted a 63 percent jump in 2013 pretax
profit to 1.48 billion shillings ($17.16 million), has already
secured regulatory approval for a seven-year, 20 billion
shilling corporate bond.
"It is an issue of timing so we can get good rates," Frank
Ireri told Reuters after an investor briefing.
Kenya plans to start marketing the Eurobond of up to $2
billion this month. A successful issue is expected to put
downward pressure on local lending rates, Ireri said.
Funds raised through Housing Finance's bond will be used to
support growth, including hiring of new staff, opening of five
new branches and increased lending, with a view to growing the
"We are optimistic, expecting our balance sheet to grow by
30 percent this year," Ireri said, citing improved macroeconomic
stability, higher government spending and demand for investment
opportunities from locals and foreigners.
Housing Finance reported its non-interest income increased
almost five-fold to 1.3 billion shillings during 2013, driven by
growth in property sales.
In 2012, Housing Finance revived its housing development arm
to tap a fast-growing middle class in east Africa's biggest
economy. Kenya faces a huge housing deficit, with some
independent studies putting the demand at 160,000 units per
year, against a supply of 30,000 units.
In the same year the company established another subsidiary,
Housing Finance Insurance Agency. The two subsidiaries
contributed 18 percent of the profit last year, up from less
than 1 percent in 2012.
The firm raised its dividend per share by a quarter to 1.75
Ireri said the risk of further attacks by Somali Islamist
militants and their sympathisers posed the biggest risk to the
Kenya has suffered a series of attacks blamed on Somali al
Shabaab rebels including an assault on an upscale shopping mall
in the capital last September in which at least 67 people were
($1 = 86.25 Kenyan shillings)
(Editing by Richard Lough and Tom Pfeiffer)