Equity quarterly profit falls to Ksh.5.3 billion

Equity Group has posted a reduced Ksh.5.3 billion quarterly profit from Ksh.6.2 billion in 2019.

The reported 14.5 percent drop in profit between January and March is largely attributable to increased costs arising from increased provisioning from future expected losses from loan defaults.

Loan provisioning in the period rose to Ksh.3.1 billion from Ksh.409.9 million in March 2019 as the Group’s stock of gross non-performing loans (NPLs) soared by 51.7 percent to Ksh.44.6 billion from Ksh.29.4 billion last year.

Other operating expenses excluding incurred interest costs peaked at Ksh.12.9 billion from Ksh.8.8 billion in March 2019.

Equity’s total operating income however increased by 13.1 percent to Ksh.19.9 billion from increased interest and non-funded income (NFI)

This is as interest from lending increased by 14.1 percent to Ksh.15.4 billion while non-interest income grew by 15.3 percent to Ksh.8.3 billion.

The ongoing Covid-19 pandemic has been the sticking point to the lender’s performance as the region wide global slowdown results in wide spread disruptions.

“The global COVID-19 pandemic has mutated into a global economic crisis, occasioned by a sudden standstill of economic activity as a result of the global lockdown. This has introduced unprecedented uncertainty within the global financial systems prompting us to adopt a conservative approach – fortifying our balance sheet and assuring ample liquidity to support our customers,” said Equity Group Managing Director James Mwangi.

On Tuesday, Equity withdrew its expected Ksh.9.5 billion dividend pay out to shareholders as it seeks to deploy proceeds as cushioning against the presented risks becoming the second bank after NCBA to do so in Kenya.

“A strong capital and liquidity position give us the strength and capacity to cushion our business against external shocks and accommodate and walk with our customers during these challenging times,” added Dr. James Mwangi.

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Equity Group Dr. James Mwangi

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