Equity Group bounced back from pandemic woes in spectacular fashion, with net profit for the first six months of 2021 up 98.4% to hit Ksh17.9 billion driven by growth in interest and non-interest income.
Notably, all of Equity’s subsidiaries except South Sudan recorded growth in profit raising their contributions to total earnings to 21 per cent. The financial services group has subsidiaries in Tanzania, Rwanda, Congo, South Sudan and Uganda.
“The strong capital and liquidity ratios have positioned the group well for continued execution of the offensive strategy particularly in light of improving asset quality and an improving operating environment,” noted Equity Group Chief Executive James Mwangi at an investor briefing on Tuesday, August 17.
Indicative of the evolving operating environment, Equity cut loan loss provisioning by 66 per cent to Ksh2.6 billion from the Ksh7.6 made available in the same period last year.
Mwangi further highlighted the increased uptake and focus on digital banking and innovation during the pandemic.
Digital banking transactions rose 57.6 per cent to 606.9 billion from 385.2 billion recorded in the same period in 2020. The value of the digital transactions increased 113.3% to Ksh2.5 trillion up from Ksh1.16 trillion.
The gradual economic recovery occasioned by easing of various Covid-19 control measures has seen banks including Equity step up lending.
According to the latest Central Bank of Kenya (CBK) data, the manufacturing, real estate, agriculture and trade sectors have driven debt repayments and recoveries in the first half of the year. Pre-tax earnings in the first five months rose 42% to Ksh76.4 billion from Ksh53.9 billion in the same period last year.
Equity saw net interest income grow 26 percent to Ksh31.2 billion as its loan book grew to Ksh504.8 billion.
Non-interest income increased to Ksh20.4 billion representing a 45% increase.
Gross non-performing loans rose marginally to Ksh43.82 billion from Ksh42.82 billion.