Equity Group net earnings for the six months to June has jumped by 94 per cent to Kes17.5 billion from a Kes9 billion recorded during a similar period last year.
In the period, Equity Group’s net interest income surged by 26 per cent to Kes 31.2 billion from Kes 24.6 billion by June 2020 while non-interest funded income rose to Kes 20.8 billion from Kes14.4 billion.
“We are releasing this results at a time when the region is bouncing back. We are seeing GDP growth rates to almost an average of six per cent. We are readying ourselves to ride on this wave. We have not been in this position for a while,” Equity Group CEO Dr James Mwangi said.
The bank’s net loans increased by 29 per cent to Kes 504.8 billion from Kes 391.6 billion by June last year even as customer deposits surged by 51 per cent to Kes 820.3 billion from Kes 543.9 billion during a similar stage last year.
At the same time, the lenders borrowed funds for onward lending went up 78 per cent to Kes 102.3 billion from Kes 57.6 billion during the comparable period in 2020.
“The impressive results are underpinned by improved operating income and lower operating costs from truncated loan-loss provision costs,” noted Dr Mwangi.
The regional lenders gross loan provision eased to Kes 2.9 billion from Kes 8 billion in June last year after providing fully for its current portfolio of non-performing loans.
“Our non-performing loans (NPLs) ratio has now fallen to 10.7 per cent. The existing NPLs are now fully covered. The Group will only make provisions on new lending,” added Dr Mwangi during an investor briefing.
In the period under focus, the Group’s total operating income hit Kes51.9 billion from a Kes39 billion during a similar period last year attributable to rising interest and non-interest income streams growth.
Equity continues to record the bulk of transactions in their digital channels with 97 per cent of the bank transactions being undertaken on virtual platforms.
In the six months to June, the regional bank customers transacted Kes 2.45 trillion via Eazzy banking suite, agency and merchant’s outlets compared to Kes 1.16 trillion value of transactions via the same channels in June 2020.
The value of transactions through the lender’s legacy channels, branch and ATMs, posted a marginal growth to Kes 1.37 trillion from Kes 1.09 trillion recorded in June 2020.
“Our dividend suspension over the last two years has allowed us to grow the size of our shareholder funds by 26 per cent” added Dr Mwangi.
Equity Group’s subsidiary Banque Commercial Du Congo (BCDC) bank in Congo reported a 447 per cent year-on-year surge in net profit to Kes1.6 Billion on the back of improving macro-economic conditions.
Going forward, DRC is expected to be a key driver for growth. However, the subsidiary’s return on average equity of 12.6 per cent in the six months to June still remains below the group’s average but is expected to improve.
Globally, as the push to go green gathers pace, Equity Group remains optimistic to tap into this shift through its recent bank investments in the Democratic Republic of Congo which has huge copper and cobalt reserves.
Copper and cobalt demand is projected to increase fueled by rising usage of electric vehicles and charging stations, storage systems as well as the setup of fifth generation (5G) base stations.
DRC has already applied to join the East African Community trading bloc, a move that will help foster cross border trade within the region.
Equity Group has operated in the DRC since its purchase of Equity Bank Congo (EBC)in 2015.
In August 2020, the bank bought Banque Commerciale du Congo (BCDC) and soon merged with EBC forming Equity BCDC, the second-largest subsidiary of Equity Group.