Equity Group has posted a Profit after Tax of Kshs.40.9 billion for the third quarter which represents a 13% rise in profitability as compared to Ksh. 36.2 Billion that was realized in a similar period in 2023.
The rise in profitability was on the back of a 13% rise in interest income to Kshs. 125.9 billion from Kshs.111.1 billion during the period under review despite the high inflation and interest shocks which saw returns to customers in the form of interest expense grow 18% to Kshs.45.3 billion from Kshs.38.5 billion. Non-funded income grew by Kshs.2 billion and yielded a total income growth of 8% to Kshs.138.9 billion, up from Kshs.128.9 billion year-on-year.
On the other hand, Total costs grew by 6% to Ksh. 87.9 Billion. This was on the back of a 27% rise in operating expenses to Ksh. 54 Billion. While staff costs rose marginally by 4% to Ksh. 24 Billion. Whereas the loan loss provision fell by a massive 43% to Ksh. 9.9 Billion down from Ksh. 17.5 Billion.
The regional businesses contributed 51% of profit before tax and 48% of total assets to reach Kshs.1.7 trillion as at 30th September 2024. The period saw a 9% growth in customer deposits to Kshs.1.3 trillion with its customer base now at 21.3 million. This growth in deposits resulted in a 12% increase in cash and cash equivalents to Kshs.295.5 billion and growth in investment securities to Kshs.468.1 billion resulting in an overall strong liquidity position of 55%.
This performance is complemented by strong capital buffers with a core capital ratio of 15.9% and total capital ratio of 18.3% versus regulatory threshold of 10.5% and 14.5%, respectively.
Dr. James Mwangi, Equity Group Holdings Plc 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 reduction of the Central Bank Reference rates in some of the countries where we operate. With the improved liquidity, the Group continued to optimize its balance sheet, reducing leverage by Kshs.137.6 billion of expensive long-term borrowings. We are proud that the Group has sufficient cushion on its key balance sheet buffers of liquidity, capital and NPL coverage while at the same time it continues to report above industry average profitability with return on average equity of 24.5% and return on average assets of 3.1%.’’
EGH identified insurance as critical to contribute to social economic prosperity by ensuring business and individual resilience and security. The Group was recently granted a general insurance license in addition to the already
existing life assurance license.
With this license, the Group will offer holistic and integrated financial services to corporate, SME and retail customers by availing insurance solutions for all customer needs for protecting life, health, and wealth through its diverse product offering.
Equity Life Assurance (Kenya) being the first underwriting subsidiary of the Group posted 181% year-on-year profit before tax, closing at Kshs. 1.07 billion year-to-date up from Kshs. 381 million for the same period last year. ELAK had a capital adequacy ratio of 141%, indicative of the business’ strong ability to meet its obligations to customers. With return on average assets at 4.6% and return on average equity at 57.8%, ELAK continues to contribute positively q3towards the Group’s performance.