Equity Group says it will weather new COVID-19 restrictions
Equity Group will withstand any potentially negative impact of new restrictions on movement imposed by the government to curb a new wave of COVID-19 infections, its chief executive said on Monday.
Equity, which mainly serves low-income customers in rural and urban areas, increased its gross provisions for bad debts five times last year, as borrowers reeled from the impact of the pandemic.
The group had extended some loan repayment periods for up to three years to account for its own expectation of how long the impact of the pandemic would last, CEO James Mwangi told an investor briefing.
“I would say (the latest lockdown) is more of an incident within our projection of a three-year time horizon… there would be no distortion,” he said.
Last Friday, President Uhuru Kenyatta ordered the capital Nairobi and four adjacent counties closed to movement from other parts of the country, and reinstated other measures like the closure of bars, after infections and deaths rose.
Equity, Kenya’s second-biggest lender which also has operations in South Sudan, Tanzania, Rwanda, Uganda and Democratic Republic of Congo, said its pretax profit slid 30% last year to Ksh. 22.17billion ($202.28 million).
It blamed the drop on a surge in provisions for impairments.
Equity’s shares, which shed a third of their value last year due to the pandemic, fell 8% after the results were announced to Ksh. 37.70.