Equity Group, Kenya’s largest bank by market capitalization, has announced a 12.5% growth in net profit for the first half of 2024. Despite challenging economic conditions, the bank’s strong interest income performance drove this positive result.
The lender reported net profit of $229 million (KES29.6 billion), up from $203.4 million (KES26.3 billion) in the same period last year. Interest income rose 22% to $656 million (KES84.8 billion), outperforming the broader market.
Equity Group’s robust performance is attributed in part to its strategic focus on regional expansion. As growth slows in Kenya, the bank has successfully expanded its operations across East Africa, driving double-digit growth in these markets.
Dr James Mwangi, group managing director and CEO, emphasized the bank’s transformation into a regional player. He noted that regional subsidiaries now contribute significantly to the group’s balance sheet and revenue.
“The group’s regional subsidiaries have improved efficiency, contributing 47% to the group’s balance sheet in terms of deposits and loans, and driving a 55% revenue growth,” Dr James Mwangi said.
The bank also recorded steady growth in non-interest income, customer deposits, and investment securities. However, the challenging economic environment led to a 4.4% increase in gross non-performing loans (NPLs), necessitating higher provisions for loan defaults.
Despite these challenges, Equity Group’s strong capital buffers and liquidity position remain healthy. The bank’s NPL coverage ratio remains at 70%, well above the industry average.
“We are proud that the Group has a sufficient cushion on its key balance sheet buffers being liquidity, capital and NPL coverage while at the same time, it continues to report above industry profitability metrics with a return of average equity of 26.7% and return on average assets of 3.4%,’’ added Dr Mwangi.
