Listed insurer Britam has written off another $15 million from its investment in mortgage lender HF Group, raising the booked losses from the investment to $36 million in the past three years.
Britam said in its 2018 annual report that its financial performance had been affected by both the HF impairment and the general decline in the market last year, which also hit other equity investments.
The impairment shows that Britam’s management has little faith in the ability of the bank’s stock to rebound to its previous levels.
Impact on value
“The value of the investment has been adversely impacted by the changes in market interest rates following the introduction of the interest rates capping regulation. The property business did not also perform well because of the depressed property market,” the firm said in the report.
HF Group has in recent times fallen on hard times due to a slowdown in the property market, which has made it hard to sell houses and mortgages, with the decline setting in from 2017 when the prolonged General Election and the accompanying political noise disrupted business.
HF Group, which currently has 6,000 active mortgages, has now turned to the affordable housing segment to try and double the number of housing loans to 12,000 in the next two years.