Equity Group has reported a 12.5 percent growth in profit after tax in the first half of 2024 to KSh 29.6 billion from KSh 26.3 billion recorded in a similar period last year.
The rise in profitability was on the back of a 22% rise in interest income to Kshs. 84.8 billion up from Kshs 69.8billion. Non-funded income grew by Kshs.5 billion leading to a total income growth of 16% to Kshs.95.1 billion, up from Kshs.82.1 billion year on year.
On the other hand, operating expenses rose by 25.7 percent surge in operating expenses. This was driven by a 30% rise in interest expense to Kshs. 30.4 billion up from Kshs. 23.4 billion.
During the period total assets grew to KSh 1.8 trillion in the first 6 months of 2024 – a 6 percent expansion compared to the same period in 2023. The Group’s gross non-performing loans (NPLs) edged up to KSh 119.9 billion pointing to worsening credit quality stemming from a tough macroeconomic environment. Consequently, loan loss provisions were revised upwards to Ksh 10.5 billion, to mitigate the growing NPLs.
Customer loans went down 3 percent to KSh 791 billion with the Kenyan deposits similarly dropping by 8 percent to KSh 423 billion, due to the high interest rate.
The Group’s subsidiaries made a combined KSh 18.7 billion in profits before tax, with the DRC subsidiary accounting for more than 54% of that. The Ugandan subsidiary posted a 23 percent slowdown in profits before tax – KSh 1.8 billion. They also accounted for 47% of total loans (2023- 44%) and contributed 51% of profit after tax.
Dr. James Mwangi Equity Group Holdings Managing Director and Chief Executive Officer said “We are optimistic that the strong liquidity of the Group has positioned us to effectively support our customers as the economy starts showing signs of improvement in the key markets we operate in, signaled by some of the regulators’ reduction of the Central Bank Reference rates. With the improved liquidity, the Group continued to optimize its balance sheet reducing leverage by Kshs.75 billion of expensive borrowings.”
“Our customers and members should anticipate a reduction in their interest rates. This is informed by the fact that on the 6th of August, the central bank adjusted its rate from 13% to 12.75%, a reduction of 0.25%,” Equity Group CEO James Mwangi noted.