Equity Group Holdings (EGH) profits from January to June 2020 have declined by 24.4 per cent YoY to Ksh9.1 billion from Ksh 11.9 billion in a similar period last year. Equity Group blames the dip in profits to a 773% year on year rise in loan loss provision expense to Ksh8 billion from Ksh918 million last year.
Equity Bank Kenya loan loss provisions were up from Ksh450 million in the first half of 2019 to Ksh6.7 billion in the period under review.
Net interest income rose by 17 per cent to Ksh24.6 billion from the Ksh21.1 billion recorded in a similar period last year. Equity group attributes the performance to an 18.5 per cent Y.o.Y growth in interest income to Ksh32.8 billion in H1.2020 from Ksh27.7 billion in H1.2019.
Furthermore, a 22 percent growth in the loan book from Ksh320.9 billion to Ksh391.6 billion contributed to the increase in net interest income.
Interest expenses on customer deposits and placements from banking institutions rose 23 percent Y.o.Y to Ksh8.2 billion from Ksh6.6 billion in the first half of 2019.
The latest financial results reveal the impact of the waiver of mobile and internet banking transaction fees in Kenya since April 2020 on the non-funded income.
In the first six months of 2020, Equity Group saw the non-funded income decline by 13 percent to Ksh14.4 billion from Ksh16.5 billion in H1 2019. The bank attributes the drop to a decline in fees and commissions to Ksh9.22 billion from Ksh10.02 billion in a similar period last year. There was also a decline in other operating income to Ksh2.95 billion in H1.2020 from Ksh4.7 billion in H1.2019.
Total operating expenses for the group rose to Ksh27.1 billion in H1.2020 from Ksh20.6 billion in H1.2019.
Gross non-performing loans rose 55.8 percent Y.o.Y to Ksh45.6 billion in the first half of 2020 compared to Ksh29.2 billion in a similar period last year. However, on a quarter to quarter basis, the NPLs declined from 10.9 percent to 10.7 percent. The loan loss provision rose to Ksh16.3 billion from Ksh9.4 billion in the first half of 2019.
During the half-year, the Equity Group’s balance sheet grew by 17% from Kshs.638.7 billion to Kshs.746.5 billion driven by 19% growth in customer deposits to Ksh 543.9 billion from Ksh 458.6 billion.
RELATED
Equity Group Completes Acquisition of 66.53pc Stake in BCDC for $95M
What will 2020 hold for Equity Group?
