Equity Group posted a 12.5 percent growth in profit after tax in the first half of 2024 to KSh 29.6 billion from KSh 26.3 billion recorded in the same period last year.
- The uptick was primarily attributed to a 17.2 percent surge in interest income, driven by increased returns from lending activities and government securities.
- The growth was however slowed down by the 25.7 percent surge in operating expenses, while customer deposits rose by 11 percent.
- Overall Group’s customer loans went down 3 percent to KSh 791 billion with the Kenyan deposits similarly dropping by 8 percent to KSh 423 billion, due to the high interest rate.
“Our customers and members should anticipate a reduction in their interest rates. This is informed by the fact that on the 6th of August, the central bank adjusted its rate from 13% to 12.75%, a reduction of 0.25%,” Equity Group CEO James Mwangi noted.
Total assets grew to KSh 1.8 trillion in the first 6 months of 2024 – a 6 percent expansion compared to the same period in 2023. The Group’s gross non performing loans (NPLs) edged up to KSh 119.9 billion pointing to worsening credit quality stemming from a tough macroeconomic environment. Consequently, loan loss provisions were revised upwards to KSh 10.5 billion, to mitigate the growing NPLs.
“The signalling effect by the regulators is very promising as we go towards the next half of the year. We are continuously assessing the situation to ensure we are in the best position in the market,” Moses Nyabanda, Group Chief Finance Officer.
The Group’s subsidiaries made a combined KSh 18.7 billion in profits before tax, with the DRC subsidiary accounting for more than 54% of that. The Ugandan subsidiary posted a 23 percent slowdown in profits before tax – KSh 1.8 billion.
It did not declare an interim dividend in their half year earnings.
Equity Group, which trades under the ticker symbol EQTY at the Nairobi Securities Exchange (NSE), closed the previous session at KSh 39.95 ,a year-to-date gain of 18.7 per cent.
EQTY has a KSh 151 billion market capitalization making it the 2nd most valuable stock at the Nairobi bourse accounting for about 9.4 percent of the NSE equity market.
