Equity Group Holdings reported solid financial results for the first quarter of 2024, with a record profit after tax of KES 16 billion.
This was driven by increased net interest income and cost control measures.
“We have been able to turn the tide from declining profit before tax 13% in December we are now at 21% and profit after from a decline of 5% we are up to 25% being able to give a reasonable return on assets,” Dr James Mwangi, Equity Group Managing Director and CEO said.
“KES 16 billion for a quarter profit after tax is the highest profit we have ever registered in a quarter. So, it is a record quarter profit.”
However, a significant increase in non-performing loans (NPLs) remains a significant concern, increasing by 50% YoY.
“We believe that NPLs will remain elevated for quite some time because of the trading effect,” Dr Mwangi said. “We know in the region, the effect of flooding will affect NPLs.”
The group expects NPLs to ease from the fourth quarter of 2024.
Highlights
- Total Assets: Up 9.6% YoY to KES 1.7 trillion.
- Net Interest Income: Increased 28.4% YoY to KES 27.8 billion.
- Profit After Tax (PAT): Grew 25.2% YoY to KES 16 billion.
- Earnings Per Share (EPS): Up 25.2% YoY to KES 4.08.
- Gross Non-Performing Loans (NPLs): Increased by a concerning 50.0% YoY to KES 120.4 billion.
#Equity2024Q1Results pic.twitter.com/w5YtLy0XHa
— Equity Bank Kenya (@KeEquityBank) May 13, 2024
The bank’s subsidiaries in Uganda, DRC, Rwanda and Tanzania contributed 63% of the KES 20.4 billion profit before tax with a return on average equity of 27.6%.
“We see Equity continuing to position itself very strongly in the marketplace. Being the second strongest banking company. I am more excited that Equity is the most valuable banking brand in the region,” Mwangi said.
The group solidified its position as the second-largest bank in East Africa by asset base. Their assets grew to KES 1.7 trillion at the end of the quarter, compared to KES 1.53 trillion in the same period last year.
Its mark-to-market losses, which can fluctuate due to market changes, significantly decreased from a high of KES 78 billion in Q3 2023 to KES 48.4 billion at the end of this reporting period.
Dr Mwangi attributed the positive results to a strong risk management framework, a trusted brand reputation, ample capital reserves, and healthy liquidity.
“A strong risk management framework for a strong trusted brand, strong capital, liquidity, and asset quality buffers have helped leadership and management in being bold and decisive,” Mwangi said.
Equity Group has expanded beyond traditional financial services like banking and insurance to become a comprehensive force for social and economic development in Africa. Their initiatives include:
- Education: Wings to Fly scholarships and the Equity Leaders Program
- Healthcare: Equity Afia Medical Centers, provides accessible healthcare.
- Agriculture: The Kilimo Biashara program supports farmers.
- Entrepreneurship: The Young Africa Works Program empowering entrepreneurs.
- Sustainability: Social safety net programs, tree planting initiatives, and clean energy equipment distribution.
