Equity Group Net Profit Down 5% to Ksh.43.7 Billion

Equity Group Sees its Net Profit Down 5% to Ksh.43.7 Billion — Equity Group Holdings Group Managing Director Dr. James Mwangi

Equity Group Holdings (EGH) experienced a decline in after-tax profit to Ksh.43.7 billion.

This represents a 5% drop, making it the first major bank in the area to report reduced profits for the full year ending on December 31, 2023.

Key Highlights:

Equity’s total income expanded to Ksh.186.1 billion.
The total value of loans disbursed during the review period reached Ksh.887.4 billion.
The Net Interest Margin grew by 7.4%, although it decreased by 0.2% compared to 2022.
Return on equity declined by 5%, settling at 22.3%.
Customer deposits surged significantly, reaching a record Ksh.1.4 trillion across the bank’s regional markets.

During an investor briefing, Dr. James Mwangi, EGH Group Managing Director and Chief Executive Officer attributed the slump in customer deposits to the impact of inflation during the review period.

Agri-Business, an Area of Interest for Equity

The bank strategically focused on agri-business activities, with the loan portfolio in the agriculture sector growing from 3% to 16% over the previous year.

Dr. Mwangi expressed the bank’s interest in further expanding the loan portfolio for farmers to 30% by 2030.

Equity stands out as the sole bank that has partnered with the World Food Programme (WFP) in the region to support the agriculture sector.

Largest Climate Change Financier Globally

The International Finance Corporation, a private arm of the IMF, recognized Equity as the lender with the highest number of climate change initiatives globally.

Dr. Mwangi emphasized that mitigation and adaptation to change remain key priorities for the bank.

According to the GMD, Equity takes pride in being the only bank in the region with the highest number of loans dedicated to climate change initiatives.

Also Read: Equity Bank Increases Cost of Loan to 18.24%

Despite challenges, including a Non-Performing Loan (NPL) ratio that fell to a record 11.7% from 12.5% during the same period in 2022, Equity Group remains optimistic.

The bank aims to leverage its established markets for further growth, with Kenya leading at 31% growth potential over the next year.

Other countries in the region, such as Rwanda, Tanzania, Uganda, Democratic Republic of Congo (DRC), and South Sudan, also contribute to this growth.

EGH, Largest Bank by Total Assets at Ksh.1.8 Trillion

Despite recording negative results in its full-year report, Equity Group has achieved remarkable growth in its total assets, which now stand at a record Ksh.1.8 trillion.

This positions Equity Group as the largest lender in East Africa, with a robust balance sheet.

According to Dr. James Mwangi, it took Equity Group 38 years to reach the Ksh.1 trillion milestone.

The bank is now optimistic about achieving the Ksh.3 trillion mark in the shortest time possible.

Among the total assets, the Kenyan Government holds the largest stake in government securities, amounting to Ksh.500 billion, followed by liquid cash at Ksh.300 billion.

The bank’s board of directors has approved a dividend payout totaling Ksh.15 billion, with investors set to receive Ksh.4 per share.

Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.