Equity Group Plc reported on Monday an 11% to Ksh 20.1 billion on the back of a 496% increase in loan loss provisions from 5.3 billion in 2019 to Ksh 26.6 billion in 2020.
Net interest income grew by 23% to Kshs 55 billion up from Kshs 45 billion driven by a 30% growth on customer loan book and 26% growth in investment in Government securities. Non-funded income grew at 27% to reach Kshs 38 billion up from Kshs 30 billion to contribute 41% of the total income.
Total operating costs grew by 67% to Kshs 71 billion up from Kshs 42.5 billion driven by a 496% growth in gross loan provision of Kshs 26.6 billion up from Kshs 5.3 billion in the prior year, increasing the cost of risk to 6.1% up from 1.3% the previous year. The higher loan loss provisions enhanced NPL coverage to 89%.
The Group said it weathered the COVID-19 disruption to register a 51% growth in its balance sheet with total assets growing to Kshs 1.015 billion (One trillion and fifteen billion shillings) up from Kshs 674 billion the previous year.
The growth delivered through both organic and merger and acquisition strategies saw the group become the first financial institution to cross the trillion shillings rubicon in East and Central Africa.
“The growth has been driven by a 53% increase in customer deposits which grew to Kshs 741 billion up from Kshs 483 billion after it acquired 66.5% ownership in the second-largest commercial bank in the Democratic Republic of Congo, Banque Commerciale Du Congo (BCDC), “Dr James Mwangi, Equity Group Managing Director and CEO said.
Its long-term debt financing grew by 71% to Kshs 97 billion from Kshs 57 billion with shareholders’ funds growing by 24% to Kshs 139 billion up from Kshs 112 billion
The Group Board of Directors did not recommend a dividend for the year ended 31st December 2020, opting to prudently devote internally generated funds to the Group’s successful offensive and defensive strategy.
The lender says its strategy has seen the balance sheet expand by 51% with deposits growth of 53% and loan growth of 30% being capital weighted items and the enlarged operations of a balance sheet of more than a trillion Kenya shillings requiring capital risk weighting.