Equity Group Holdings remains bullish that its balance sheet will hit Ksh 3 trillion by 2025, buoyed by trade financing.
The Group’s Chief Executive James Mwangi told an investor briefing in Nairobi on Tuesday that 19 per cent of the balance sheet doubles every five years, then by 2025, it will have achieved Ksh 3 trillion balance sheet “without fail”.
“It is growing three times faster..” he said. “With the normalization of Covid-19 risk, the Group is focused on using the balance sheet agility to unlock efficiencies and optimisation.”
Equity has an efficiently funded and leveraged balance sheet structure with 73% of funding from short term customer deposits – Dr. James Mwangi, Equity MD & CEO #Equity2022HYResults pic.twitter.com/DDWlPVbEG5
— Equity Bank Kenya (@KeEquityBank) August 23, 2022
The Nairobi Securities Exchange (NSE) listed lender made a 36% profit after tax of Kshs 24.4 billion, up from Kshs 17.9 billion the previous year.
During the first half of 2022, net interest income grew by 28 per cent to KSh39.8 billion, up from KSh31.2billion recorded in the same period last year.
The group’s loan book grew by 29 per cent to KSh650.6billion, up from KSh504.8billion while their investment in government securities edged up 16 per cent.
Total assets grew by 19 per cent to Sh1.33 trillion from Sh1.1 trillion recorded in the first half of 2021.
“While Equity had stated its intention to reduce its holdings of Government securities and focus on growing its loan book, particularly on the back of the approval of its risk-based credit pricing model, the Group has highlighted the difficulty of expanding its loan book in tandem with the low-cost funds it has been receiving from development partners.
This, coupled with increasing yields on bonds, has reduced the pace at which the Group is selling their holdings of Government securities.
In light of the above, we expect the bank to continue reporting significant increases in interest income from Government securities while carrying the effects of fair value losses on its comprehensive income statement,” commentary from Sterling Investment Bank.
