Equity Bank
Equity Group

Equity Bank net profit drops by 6.5% to Ksh. 42 Billion for the full year 2023

Equity Bank has reported a net profit of Ksh. 41.98 Billion for the year ended December 2023. Which is a 6.48% from what was reported in a similar period last year.

The drop in profitability was due to a rise in total costs by 52% to Kshs.128.2 billion up from Kshs 84.5 principally driven by a 139% growth in loan loss provision of Kshs 32.8 billion up from Kshs.13.7 billion to strengthen asset quality buffers. Other operating expenses and staff costs grew by 39% and 28% respectively driven by high inflation and depreciation of the Kenya shilling.

During the period, net interest income grew by 21% to Kshs.104.2 billion up from Kshs.86 billion while non-funded income registered an impressive 30% growth to Kshs.75.9 billion up from Kshs 58.3 billion. Gross trade finance revenue grew by 90% to Kshs.11 billion from Kshs 5.8 billion driven by a 106% growth of trade finance related lending and 26% growth of trade finance guarantees and off-balance sheet items.

Equity Bank Kenya accounted for the bulk of NPLs at 69.6 percent in 2023. It also accounted for the lion’s share of new provisions, where its local loss cover went up to Sh22.98 billion from Sh7.84 billion in 2022. The unit’s contribution to the Group’s net profit stood at Sh26.7 billion, down from Sh33.4 billion in 2022.

The DRC operation, meanwhile, saw its contribution rise to Sh12.1 billion from Sh5.8 billion in 2022. While Equity Bank Rwanda saw its contribution rise to Sh4.2 billion from Sh2.8 billion, partially boosted by the integration of Cogebanque in December after the conclusion of Equity’s acquisition of the Rwandan lender in November 2023.

Dr James Mwangi said, “With clarity of the Africa Recovery and Resilience Plan, strong leadership and human capital, strategic positioning in one of the world’s fastest growing regions, a diversified business model across banking, insurance, health, philanthropy, technology and its execution, risk management capabilities, resilience and strong buffers, Equity is uniquely positioned to deliver on a positive and promising focus to all its stakeholders.”