Equity Group Holdings on Tuesday, May 16 announced its results for the first quarter of 2023. The lender recorded a profit after tax of Ksh12.8 billion in the first three months of 2023, up 8 percent compared to a similar period last year when net profit stood at Ksh11.9 billion.
The lender’s total income in Q1 2023 stood at Ksh39.7 billion, up 28% from Ksh30.9 billion in Q1 2022.
Growth was driven by an increase in loans issued as well as customer deposits. Non-funded income grew by a whopping 57% to Ksh18 billion in Q1 2023 up from Ksh11.5 billion in Q1 2022 – with the spike attributed primarily to an uptick in trade financing.
“As Equity Group we have remained focused on our strategy of agility, flexibility & being more intentional and deliberate in our execution, in order to increase our non funded income which is not subject to cyclic or balance sheet shocks,” stated CEO Dr. James Mwangi, adding: “Our non funded income was driven primarily by trade finance towards intra-country & intercountry trade.”
Customer deposits grew to Ksh1.1 trillion in the first quarter of 2023, up from Ksh900.9 billion in Q1 2022, while Equity’s loan book grew to Ksh756.3 billion in Q1 2023 up from Ksh623.6 billion in a similar period last year.
“Customers have developed confidence in technology and this is evident as 82% of transactions are cashless,” Dr. James Mwangi noted.
“One of our focus is to digitize the bank and make it an online business. Our intention is to make mobile channel the channel of choice.”
Eyeing the insurance sector for further growth, the company is venturing into the general insurance business. Equity has secured approval in principle from the Insurance Regulatory Authority (IRA) to establish a general insurance company. Last year, it ventured into life insurance with the creation of Equity Life Assurance Kenya (ELAK), which according to Equity has gained 2.9% of the life insurance market in Kenya in 9 months.
“Interestingly is the diversification from banking to insurance. Yesterday we communicated to the public that we had been given a general insurance license. This is the new frontier and this is where the growth in the company will come from,” Mwangi asserted.
Mwangi also maintained his long-held stance that the lender’s DRC unit will eventually overtake its Kenya base in volume and profitability. He also highlighted key inflation as a key concern for the company.
“We anticipate by 2027, our DRC subsidiary will have caught up or surpassed our Kenya subsidiary in business volume. Secondly, Forex and our DRC subsidiary has become the biggest driver of forex income within the group having surpassed Kenya,” he observed.