HF Group: Q3 Results and Rights Issue

The Mwango Capital Podcast

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-48:45

HF Group: Q3 Results and Rights Issue

Episode 101

Mwango Capital

Dec 07, 2024

Transcript

In this episode recorded on 02.12.2024 and hosted by Ramah Nyang, we are joined by Robert Kibaara - CEO of HF Group as we dive into HF Group's Q3 2024 results and their rights issue.

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Key Quotes

“We have heavily digitized our business… We have 54 journeys and we embarked on enabling customers to be able to consume services of the bank through the digital channels, pretty much as if they would come to the bank. And now I can say 80% of our transactions, as I said earlier, are through digital channels and our banking app has been voted the best banking app in Kenya. Now I can tell you this digitization work has really pulled down our costs by removing manual processes, both in the back office and in the customer-impacting channels. So this will remain a key pillar to our transformation.”

“Branches have an optical value. And I think people feel the confidence of knowing that if I have an issue, my branch is not far away. So that's the first reason. The second reason is branches have become conversation centers. So people use branches less for transactions and more for conversations, especially business customers who like to come, and have a conversation with the relationship managers or relationship managers go to them. And thirdly, branches are also advisory centers where you can be able to advise clients. And then also finally scale. Sometimes people want to see that the company they are banking with also has many branches.”

“Keeping an eye on the cost, focusing on the target sectors that are fast-growing, less risky, and less susceptible to macroeconomic forces, we believe that we can be able to sustain this growth.”

“You should be asking me because I'm one of the smaller investors of the group as a person. Why have I taken up my rights and why have I invested in the company? In fact, I've applied for more shares than my rights. And why is that? I'll say a few things. Number one, HF group the group itself and all its subsidiaries are profitable. And if you just think about the new capital, the new incremental money that is coming, it is coming to power the growth of the business. Now, today, the costs of the business, the establishment costs of the business, what we call overheads are all taken care of. So we are not going to double the technology of the company. We are not going to double the number of staff. So that entire cost is already taken care of. So the marginal or incremental capital that is coming in will power the growth of the business, and it's going to accelerate the growth of the business and the rewards to shareholders are going to be sooner.”

“The reason why I would encourage somebody to invest in this business is just the fact that they can be able to grow with the business as it grows, and in my view, it's a very good opportunity.”