Equity Group first quarter net profit rises 64% to Kshs. 8.7B

Equity Group has reported a profit after tax of Kshs. 8.7 billion for the period ended 31st March 2021 which rose 64% from Kshs. 5.3 billion recorded during a similar period last year.

Equity Group Chief Executive Officer Dr James Mwangi while issuing investor briefing on Wednesday attributed the growth to ongoing economic recovery after COVID-19 impact which has since seen customers resume loan repayments resulting to surge in non-interest income.

“Of the 31% of the loan book, or Kshs.171 billion Covid-19 accommodated or rescheduled loan book, Kshs.59 billion has resumed repayment with Kshs. 5 billion fully repaid and Kshs.3 billion behind schedule in repayment. Kshs.66 billion is expected to resume repayment within 6 months or by 30th September 2021,” said Dr Mwangi.

Over the three month period, net loans grew 29% to reach Kshs. 487.7 from Kshs. 379.2 billion issued last year with non-performing loans (NPLs) accounting for 11.3% of the loan book.

The lender also saw its loan loss provision shrink by 64% to Kshs. 1.1 billion from Kshs. 3 billion prior to the pandemic.

Net interest income grew 32% to stand at Kshs. 20.3 billion compared to Kshs. 15.4 billion registered during the same quarter in 2020 while non-funded income surged to Kshs. 10.7 billion, a 30% growth during the period.

“Operationally, the Group focused on generating and growing non-funded income, treasury efficiency, geographical expansion and business diversification, business transformation through innovation and digitization, balance sheet optimization and agility, asset quality and risk mitigation while pursuing efficiencies and brand development through social impact investment underscoring the performance of the Group,” Dr Mwangi added.

Equity Group appetite for government securities increased during the period growing 36%, from Kshs. 189.9 billion last year to Kshs. 258.9 billion.

The lender saw its balance sheet grow 54% to hit Kshs. 1.07 trillion driven by customer deposits which grew 58% to reach Kshs. 790.6 billion.

The Group registered a balance sheet expansion of 54% to reach Kshs. 1.07 trillion driven by a 58% growth in customer deposits underpinned by Kshs.140 billion shareholders’ funds.

“A liquid balance sheet with Kshs.500 billion of cash, cash equivalents and government securities reflect the agility to redeploy funding seamlessly as the economies recover from the adverse impact of the Covid-19 multi-crisis.”

Equity Group subsidiaries registered resilience to contribute 40% of total deposits and total assets and 23% of profit before tax with Rwanda and Uganda delivering above cost of capital returns, Dr Mwangi said.

To support customers struggling during the pandemic, the lender invested Kshs.1.7 billion in social response, forgoing Kshs. 1.5 billion in waived mobile transaction fees and waiving Kshs. 1.2 billion in loan rescheduling fees.

  

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