I had written this post with one headline but after a colleague who was passing by saw it(snoopy guy!) and asked why prospective British American shareholders care how Housing Finance performs.
I was about to clench my fist and say something not very intelligent then I remembered Jack Nicholson’s advice in the movie Anger Management:
“Breathe in, breath out. Just explain”
That’s how I came to write the second part of the headline. Yes, HF made a cool KSh345 million pre-tax profit in the first half of this year. This is a 67% increase from KSh205 million last year. If you though that’s good news, wait for the next tit bit. Its mortgage income was up by 31% to KSh1.345 billion.
I will not dazzle you with figures anymore. Let me tell why it matters to you. As a participant in the British American IPO, you should track the performance of two companies very closely. Equity Bank and Housing Finance. This is because British American Investment Company, the company you are buying at the IPO owns 11.03% of Equity Bank and 16.57% stake in Housing Finance.
These two companies’ high profits may translate into higher dividends for British American and more earnings for you too. And both HF and Equity have not disappointed for the last few years and their prospects look even brighter.
In fact both have shown tremendous growth and are in growing sectors. The ratio of mortgage to GDP is 2.5%. That means it is very low and the potential for growth is unlimited. HF is planning other innovative products including a fixed interest mortgage product for the first five years. That means you will be protected from the shenanigans that affect the rise and fall of interest rates on your mortgage. Did I also mention that demand for housing stands at 150,000 an year while only 30,000 are supplied?
Equity Bank? That success story needs a day of its own but Iam sure you know what the bank has done for the industry and millions of Kenyans.
By buying into British American IPO, you are joining a club of champions!