Equity Group posted Sh17.9 billion net profit for the first half of 2021 in a 98 per cent growth compared to the Sh9.1 billion reported same time last year.

The lender attributed the growth to a strategy that grew deposits by 51 per cent as net non-performing loans reduced by Sh5.4 billion.

“The defensive and offensive strategy adopted by the group at the onset of the Covid-19 pandemic to create resilience, agility and recovery has been very effective in positioning, navigating and driving performance,” said Equity Group Managing director and CEO, James Mwangi.

Total income increased by 33 per cent to Sh51.6 billion up from Sh38.7 billon driven by a 26 per cent surge in net interest income and a 45 per cent growth in non-funded income of fees, commission and transactions.

During that period, total operating costs stood at Sh27.8 billion against a total income of Sh51.6 billion driving profit before tax to Sh23.8 billion up from Sh12 billion, a 99 per cent growth.

Net interest income grew to Sh31.2 billion up from Sh24.6 billion while non-funded income grew to Sh20.4 billion up from Sh14.1 billion.

Total assets grew by 50 per cent to Sh1.12 trillion from Sh746.5 billion while deposits grew by 51per cent to Sh820.3 billion from Sh543.9 billion.

Loans and advances grew by 29 per cent to hit Sh504.8 billion up from Sh391.6 billion, while investment in government securities grew by 46 per cent to Sh315.5 billion up from Sh216.4 billion.

Aggressive provisioning during the previous year under the defensive strategy saw net non-performing loans decline from Sh28.3 billion to Sh22.9 billion.

Of the group’s Sh171 billion Covid-19 restructured loan book, Sh162 billion is categorised as performing with Sh103 billion having resumed repayments.

Six billion shillings has been fully repaid, while Sh5 billion is categorised as non-performing.

Impressive growth

Mwangi projected impressive growth for the group going forward, noting that the bank is growing five times faster compared to the rest of the banking industry.

“We see a very sustained good performance for the medium term because of the operating environment.

So the issue for the group is how to tap into this momentum of growth of the economies,” he said.

Mwangi said gross domestic product (GDP) growth in the countries where Equity Group operates is projected to grow at an average of six per cent this year as per IMF projections.

The group has operations in Kenya, Uganda, Tanzania, Rwanda, Congo DRC, and South Sudan.

Of these Kenya has the highest GDP growth projection at 7.6 per cent while Tanzania has the lowest at 2.7 per cent.

“Kenya is our main market, so that tells you how well positioned we are to tap into this recovery. To ride on this wave that is lifting all boats,” Mwangi said.

“We haven’t been in this position for a long time in this region that the common theme within the region is stable micro-economic environment.

That makes planning and budgeting for recovery much easier because of the predictability of the environment,” he added.