Equity Group records 12% jump in net earnings to Ksh.48.8 billion

Equity Group has registered a 12 percent growth in profit after tax to stand at Ksh.48.8 billion for the year ending December 2024.

This is up from Ksh.43.7 billion for the period recorded in the previous year ended December 31, 2023.

According to the lender, this reinforces their continued success on the back of the group’s diversified business model, prudent financial management, and investment in the region.

In the period under review, the lender saw a marginal decline of 1 percent in its balance sheet, which oscillated around Ksh.1.8 trillion. The bank’s loan portfolio also shrunk by 8 percent to Ksh.819.2 billion.

The bank’s subsidiaries across the region boosted the lender's revenue, contributing 54 percent (Ksh.103.6 billion), up from 49 percent recorded the previous year, with the Kenyan businesses contributing only 46 percent of the total revenue (Ksh.89.3 billion).

Dr. James Mwangi, Group CEO, Equity Holdings said: "While on the face of the balance sheet it shows like we didn't grow, that we are mark-timing at Ksh.1.8 trillion, if it was like that the currency was constant at Ksh.160, we could have grown from Ksh.1.8 trillion to Ksh.2.1 trillion—that's an 18 percent growth. So, we increased our profit from Ksh.43.7 billion to Ksh.48.8 billion after tax, but before the tax increase, our profit grew from Ksh.51.9 billion to Ksh.60.7 billion."

Despite the lender's move to reduce its credit exposure by cutting its loan to customers by 8 percent to Ksh.819.2 billion, in the same period, the lender saw a jump in non-performing loans, which grew 12.2 percent, with the Kenyan business taking the biggest hit at 17.4 percent, above the industry average of 16 percent.

Non-performing loans held by corporates were the highest at 22.4 percent, followed by MSMEs at 13.5 percent, with retail contributing 5.8 percent.

"You tell the shareholder the truth—these are difficult times. We all know that NPLs in Kenya are around 16 percent as an industry. We are glad that we are at 12 percent when the industry is at 16 percent. But if you look, we stand out as the bank that has made the biggest provision relative to the balance sheet," said Mr. Mwangi.

The bank’s shareholders will receive a bump in their dividend payout, with the lender set to spend 6 percent more on dividend payment, from Ksh.4 per ordinary share to Ksh.4.25, resulting in a total dividend payment of Ksh.16 billion.