By Vincent Odhiambo | Equity Bank has posted a 64% increase in net profit in the first quarter of 2021.
The Group earned KSh8.7 billion in the period under review compared to Ksh.5.3 Billion last year.
Equity Group Holdings PLC Chief Executive Officer Dr. James Mwangi attributed the rise in performance to growth in interest income and lower loan loss provisions.
The lender’s net interest income went up by 28% from Ksh.11.5 Billion in the first quarter of 2020 to Ksh.14.8 Billion this year while their loan loss provisions reduced by more than half at -64% from Ksh.3B in 2020 to Ksh.1.1 Billion in 2021.
“We are glad that the projection we had on the contribution from the subsidiaries has been realized three years in advance,” said Dr. James Mwangi on Wednesday, during investor briefing and release of Q1 2021.
The group’s total assets increased by 54% from Ksh.693.2 Billion in 2020 to Ksh.1.1 trillion over the same period this year which the Group attributes to a 58% growth in deposits.
The top-tier lender is also stamping its foothold in the region, with Uganda and Rwanda’s performance almost at par with Kenya.
“Uganda and Rwanda are matching Kenya in terms of return on assets. It took Kenya 16 years to get a 4 percent return on assets. It has taken Uganda 14 years and Rwanda 12 years. We are hopeful DRC will be able to match the return on assets in under 10 years,” said Dr. Mwangi.
Despite the ravages of the COVID-19, Dr. Mwangi says the prospects of the COVID-19 vaccine, lifting of containment measures and the flow of stimulus package have enabled them to bounce back faster.
The Group has now gone back to its pre-COVID-19 period performance as 41% of its income is generated from non-funded income.
“We are proud of the Ksh.4.4 Billion we contributed to complement the government, health and social responses in managing the Covid-19 crisis.”
Equity Group is taking advantage of fintech to become a global player in terms of processing payments and enabling global trade with 98% of their transactions taking place outside the branch.
“Our clients have become digital and moved to digital channels and even corporate and businesses are now using our digital channels to do business.”
In what comes as good news to its shareholders, the bank has revised and enhanced its return to equity outlook from 22%-27% in 2020 to 25%-30% and return on assets from 3%-4% to 3.6%-4.3%
