Equity Group Plc net profit slumped by 14.6% to KSh 14.8 Billion at the end of the third quarter period ending 30th September 2020 from KSh 17.3 Billion posted in a similar period last year. These Q3 earnings are also below the KSh 15 Billion in Q3, 2018.
The lender’s subdued financial performance is viewed against its bulging non-performing loans portfolio, which nearly doubled to KSh 51.8 Billion from KSh 30.5 Billion during the period under review.
These earnings provide a bird’s view of the financial strain banks are undergoing to survive the pandemic, with experts predicting massive layoffs and cost-cutting measures in the sector going forward.
READ; Stanchart Kenya to lay off 14% of Workforce Amid Covid-19
Equity Group is the second lender to release its Q3 financials, which catapults it to the most profitable bank’s position, ahead of its closest rival KCB-which posted a 43% decline in net profit of KSh 10.9 Billion in Q3, 2020.
Equity Group’s Q3 pre-tax profit declined by 24% from KSh 24.8 Billion in the nine months of 2019 to KSh 18.9 Billion in Q3, 2020, the lowest level in four years.
Commercial banks have been forced to offer moratoriums and renegotiated terms of credit facilities advanced to customers as the COVID-19 pandemic disrupts individual households’ and businesses’ business and income levels.
Equity Group’s balance sheet size increased to KSh 933.9 Billion from KSh 677.1 Billion.
Customer deposits rose to KSh 478.1 Billion to KSh 691 billion as competition for deposits between lenders intensifies.
Net loans and advances to customers edged upwards from KSh 348.9 Billion to KSh 453.9 Billion.
Interest income on loans increased to KSh 36 Billion from KSh 28.9 Billion while gross non-performing loans increased by 69.4% year on year to Ksh 51.8 Billion.
Earnings per Share (EPS), which indicates how much a firm earns from each share of its stock, also a used metric to estimate corporate value, fell from KSh 4.59 in Q3, 2019 to KSh 3.93 at the end of nine months ending September 30th, 2020.
During the Q3, 2020 period, Equity Group’s mobile and internet banking transactions comprised 83% of transactions outside the branch. This is compared to 9% executed at agency outlets, 2% at the branch, 2% at the ATM, and 3% through other channels.
In total, customers of the bank now do 98% of their transactions outside the banking hall.
In terms of transaction value, mobile and internet banking account for 33% compared to 41% at the branch, 18% at the agency outlets, 5% transacted through the ATMs while other channels take up the remaining 3%.
RELATED;
KCB Posts KSh10.9 Billion Net Profit in Q3
Kenya Court of Appeal Authorises Taxation on Card Interchange Fees
