The only licensed mortgage lender in Kenya posted a rapid climb in profitability with pre-tax profits rising 50% from Ksh48 mn (US$0.6 mn) to Ksh72 mn (US$0.9 mn). The performance was attributed to good top-line growth that saw net interest income rise 21% to Ksh328 mn (US$4.3 mn) and prudent cost management that saw the expense ratio decline by 610bp from 78.6% in 2009 to 72.5% in 2010.

The mortgage lender is expected to benefits from growth in housing loans up 36% by February 2010 and through partnership with listed microfinance lender Equity Bank Group. There have been many unsubstantiated rumours that Equity Bank will purchase the country's only mortgage lender, however, there has been no concrete commitments made.

The mortgage lenders’ core capital and capital adequacy ratios dropped 6% and 9% respectively to 21% in 2010 vs 32% a year ago. Last year the company saw its EPS rise 72% from Ksh0.59 per share to Ksh1.02 per share and dividend payment rise 67% from Ksh0.30 per share to Ksh0.50 per share. The first quarter 2010 EPS is up 53% to Ksh0.31 per share and the company currently has a 1.2x pbv.