Equity Group posts Ksh.22.6 billion full year profit


Equity Group posts Ksh.22.6 billion full year profit
Equity Group Managing Director James Mwangi addresses investors during the bank's quater 3 update on November 12

In Summary

  • The notable double digit growth in the lenders profitability is largely attributable to growth in both lending and costs containment through greater channel optimization.
  • Investments in digitization further contributed to the Group’s growth with mobile and internet banking now holding a greater 79 per cent count in transactions while 93 per cent of the bank loan issuances are now handled on the mobile platform.
  • The lender will pay out an increased Ksh.2.50 dividend per share (DPS) to shareholders from the previous two shillings after growing the individual shares earnings to Ksh.5.93 from Ksh.5.22.

Equity Group has posted a 14 per cent growth in profit after tax for the year ending December 2019 to Ksh.22.6 billion.

The notable double digit growth in the lenders profitability is largely attributable to growth in both lending and costs containment through greater channel optimization.

Loans and advances to customers grew ahead of investment in government securities at 23 per cent to Ksh.366.4 billion from Ksh.297.2 billion in 2018.

Investments in government securities meanwhile rose by seven percent to Ksh.172.2 billion to see income from the Treasury surge forward by 12 per cent to 19.1 billion.

The Group’s non-interest funded income (NFI) meanwhile returned from a slide in 2017 to grow by 19 per cent to Ksh.29.9 billion taking the lender’s total income for the period to a higher Ksh.74.9 billion.

Customer deposits meanwhile improved 14 per cent to Ksh.482.8 billion from Ksh.422.8 billion.

Commenting on the performance, Equity Group Managing Director James Mwangi lauded the lender’s ‘perfect mix’ in business strategy to the continued rise in earnings.

“Execution of the group’s business strategy continued to yield results as non-funded income contributed 40 per cent of the Group’s total income reflecting quality and diversification of income,” he said.

The bank investment in the region continued to pay-off as the contribution of its subsidiary rose to 18 per cent from 15 per cent in the period.

The Group’s operations in the region delivered an average 37 per cent growth in profit after tax after greater asset growth and deposit taking with businesses in the Democratic Republic of Congo (DRC) and South Sudan leading the way in profitability.

Investments in digitization further contributed to the Group’s growth with mobile and internet banking now holding a greater 79 per cent count in transactions while 93 per cent of the bank loan issuances are now handled on the mobile platform.

As such, the bank’s costs to income ratio (CIR) has strengthened to 51 per cent from 52.4 per cent last year with the cost of funds remaining muted at 2.9 percent from 2,8 per cent.

Nevertheless, the Groups asset quality has deteriorated slightly as non-performing loans pick up to nine percent from the previous 8.3 percent with the bank’s Tanzanian unit marking the greatest rise in the stock of bad loans.

The Group assets have however risen to Ksh.673.7 billion from Ksh.573.4 billion in 2018.

The lender will pay out an increased Ksh.2.50 dividend per share (DPS) to shareholders from the previous two shillings after growing the individual shares earnings to Ksh.5.93 from Ksh.5.22.

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Story By Kepha Muiruri
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