Equity half-year profit surges by 94 per cent to Ksh.17.5 billion

Lender Equity Group has nearly doubled its half-year earnings after posting a 94 per cent surge in net profit to Ksh.17.5 billion for six months ending in June.

The meteoric rise in earnings from a flat Ksh.9 billion at the same time last year is greatly attributable to improved income for the regional based bank alongside muted costs.

For instance, Equity has seen its total operating income grow by 33 per cent to Ksh.51.9 billion from a lower Ksh.39 billion on improving revenue streams.

The Group’s net interest income stood at Ksh.31.2 billion in the period from Ksh.24.6 billion while non-interest funded income (NFI) hit Ksh.20.8 billion from Ksh.14.4 billion.

Meanwhile, Equity has mitigated its overhead costs with total operating expenses rising only marginally to Ksh.28.1 billion from Ksh.27.1 billion in June 2020.

The muted costs growth have been supported by lower provisions on expected credit losses at Ksh.2.9 billion from a greater Ksh.8 billion last year.

The Group’s gross non-performing loans have however surged to Ksh.62.2 bilion from Ksh.45.6 billion.

During the period, Equity has continued to expand its balance sheet with total assets stretching to Ksh.1.12 trillion from Ksh.746.5 billion in June 2020.

The assets growth has been supported by a 28.9 per cent increase in net loans and advances to customers to Ksh.504.8 billion.

Meanwhile, the bank’s customer deposits have hit Ksh.819.7 billion from Ksh.543.9 billion previously.

Equity Group Managing Director James Mwangi has anchored the performance on improving macro-economic fundamentals as regional economies continue their re-emergence from the COVID-19 crisis.

“We are releasing this results at a time when the region is bouncing back. We are seeing GDP growth rates to almost an average of six per cent. We’re preparing ourselves to ride on this wave. We have not been in this position for a while. Economic activity is bouncing back,” he said.

“We see a very good and sustained performance over the medium term on the stable macro-economic environment. The challenge for the Group is to build on this momentum across our markets.”

Subsequent to the improved performance, Equity Group earnings per share have improved to Ksh.4.65 from a lower Ksh.2.39.

The board of directors at the bank have not recommended the payment of an interim dividend for the period but Equity is expected to resume dividend payments at the end of 2021 after a two year hiatus.