Equity Group on Thursday reported a 17% reduction in profit for the nine months ended September 30, 2020 to Ksh14.8 billion down from Ksh17.3 billion reported last year.
The lender just like its peers seems to have caught a cold from the COVID-19 Pandemic with the decline in profitability directly attributable to high loans provisioning as the group seeks to cushion itself from expected loan defaults in light of the COVID-19 Pandemic.
As such, in its balance sheet for the period under review, the lender has keyed in Ksh14.8 billion as the loans provision, eight times the Ksh1.9 billion it quoted the previous year.
As a result of the higher provisioning, the lender’s total operating costs have adjusted up by 43 percent to Ksh58.1 billion from Ksh40.5 billion last year.
By the same token, the group’s pile of bad loans have surged by 170% to Ksh51.8 billion from Ksh30.5 billion last year.
Overall, the group’s balance sheet grew to Ksh934 billion up from Ksh677 billion representing a 38% increase.
The group’s interest income stood at Ksh52 billion at the close of September 2020 lifted by fat earnings from loans and advances which brought in Ksh36 billion.
Conversely, the group’s non-interest income for the period stood at Ksh24.8 billion while customer deposits also rose to Ksh691 billion from the Ksh478 billion posted last year.
Loans advanced to insiders also shot up to Ksh12.4 billion up from Ksh9.2 billion.
The lender’s earnings per share (EPS) therefore fell to Ksh3.93 from Ksh4.59.