Equity’s half-year earnings surge 12% to Sh28.5Bn
Regional banking giant Equity Group has announced a strong financial performance for the first half of the year, posting a 12 percent increase in net earnings to Kes28.5 billion.
The bank attributed this growth to higher interest and non-interest income across its subsidiaries, demonstrating the bank’s resilience and strategic maneuvers in navigating a volatile financial market across East Africa.
In an investor briefing held on Monday, CEO Dr. James Mwangi cited the role played by the bank’s regional units in powering this performance showing that the group’s income for the six months saw a 17.2 percent jump, reaching Kes54.4 billion.
The bank’s non-interest income also saw a significant rise, climbing to Kes42.8 billion, further solidifying Equity’s strong showing during the half.
Among the standout performers was Equity’s Rwanda unit, which experienced a remarkable 10.8 percent increase in net earnings, hitting Kes13.6 billion.
Meanwhile, in the Democratic Republic of Congo (DRC), Equity BCDC recorded a stronger 19 percent growth in net profit, reaching Kes7.4 billion in just six months.
Dr. Mwangi informed shareholders that the bank is on track to deliver strong dividends this year, with earnings growing steadily at 12 percent.
Despite these gains, the bank faced challenges, particularly in its loan portfolio, which saw a 3.2 percent contraction to Kes791 billion. This decline was largely due to reduced borrowing and the reevaluation of dollar-denominated loans as the Kenyan shilling lost ground against the US dollar, the bank explained.
However, Dr. Mwangi expressed confidence in reversing this trend, noting that customers had been holding back on borrowing decisions due to high interest rates.
With the recent adjustment of the Central Bank of Kenya’s rate from 13 percent to 12.75 percent, Equity Group is optimistic about a renewed uptake of credit products.
Read also: Subsidiaries push Equity Q1 profit up 25% to Sh16 billion
Equity Group has also demonstrated a strong commitment to supporting the agricultural sector, with Dr. Mwangi revealing an increase in the bank’s loan book dedicated to food and agriculture.
“We have increased the size of our loan book dedicated to food and agriculture from 3 percent to 16 percent, and we are optimistic that we will grow this further to 30 percent of our entire loan book by 2030,” he said, underscoring the bank’s strategic focus on sustainable growth.
Moses Nyabanda, the Group’s Chief Finance Officer, echoed this optimism, stating that the signaling effect by regulators is promising as the bank moves into the second half of the year.
“We are continuously assessing the situation to ensure we are in the best position in the market,” Nyabanda added.
Equity’s balance sheet also reflected solid growth, with a six percent increase over a similar period last year, closing the half-year at Kes1.746 trillion.
Additionally, customer deposits saw a significant rise, growing by 10.6 percent to Kes1.3 trillion, showcasing the bank’s strong and growing customer base.
