Equity Group half-year net profit hits Sh26.3b

Equity Group has reported a Sh26.3 billion net profit for the first six months of the year, an eight per cent jump from Sh24.4 billion posted during the same period last year.

Group Managing Director and CEO James Mwangi said the group leveraged total interest income, non-interest income and interest expenses to drive the bottom line, enabling the lender to deliver a 27.7 per cent return on equity for its investors.

He said the results were achieved despite “a tough operating global macro environment characterised by sticky high inflation, high interest rates, volatile exchange rates and devaluation of emerging economies currencies.” The group’s earnings from customer deposits grew to Sh16.1 billion from Sh10.5 billion.

Fees on loans and advances increased from Sh4.2 billion to Sh4.6 billion, while earnings from foreign income trading also rose to Sh8.4 billion from Sh5 billion the previous year, pulling up non-interest earnings to Sh36.5 billion from Sh25.8 billion. “The drive to non-funded income growth registered good success with total income growing at 24 per cent driven by a 42 per cent growth of non-funded income, 17 per cent growth of net interest income,” Mwangi said.

In the period under review, total interest income grew to Sh69.8 billion from Sh54.9 billion, a performance that was attributed to an increase loans and advances rising to Sh44.8 billion from 35.2 billion in 2022, and trading in government securities that grew to Sh22.6 billion from Sh19.1 billion in the corresponding year.

Gross trade finance revenue grew by 117 per cent with trade finance related lending rising by 46 per cent, forex total income by 68 per cent and diaspora flows by 146 per cent to account for 12 per cent of client forex volumes.

According to Mwangi, regional geographical expansion and business diversification has seen reliance on contribution of the Kenyan banking subsidiary reduced, with other subsidiaries contributing 46 per cent of total assets and 45 per cent of profit before tax, driven primarily by insurance and the Democratic Republic of Congo business.

“We are confident Equity Group is strategically positioned as a regional systemic bank among the top 3 in 5 of its 6 operating countries to support further integration and increased cross-border trade under the African Continental Free Trade Area while supporting the region to remain the fastest growing common market in the world to offer opportunity for long term sustained value creation” Mwangi said

In the review period, total assets grew by 23 per cent to Sh1.64 trillion, while profit before tax rose to Sh35.1 billion from Sh30.1 billion in 2022.

The group’s return on equity was 27.7 per cent, slightly above the average banking sector’s 26.3 per cent, which Mwangi said “indicated a high level of profitability and efficiency” for the Group. During the period, the lender’s asset portfolio grew by 23 per cent to Sh1.6 trillion,

Elsewhere, Sidian Bancassurance Intermediary Ltd, a leading provider of innovative insurance solutions under Sidian Bank, has bagged two Awards at this year’s Think Business Insurance Awards.

It also secured the position of 2nd Runners Up – Overall Best Bancassurance Intermediary for its notable contributions and dedication to revolutionising the insurance industry.

Chege Thumbi (pictured) , CEO of Sidian Bank expressed his gratitude for the recognition during this year’s awards. “We are excited for the awards as it shows our commitment to give excellent customer experience,” he said in a statement, adding that they strive to offer insurance solutions to provide bright future for all.

The firm emerged the 2nd Runners Up – Best Bancassurance Intermediary in Non-Life and Non-Embedded Products.

The awards highlight the brand’s relentless efforts in creating innovative and transformative insurance solutions.