Equity Group Post a 51% Balance Sheet Growth During FY2020.
Equity Group Plc registered a 51% growth in its balance sheet with total assets growing to Kes 1.015 billion during the financial year ended 30 December 2020, up from Kes 674 billion posted during the same period in 2019.
The growth was achieved through both organic and merger with the acquisition strategies seeing the group become the first financial institution to cross the trillion shillings rubicon in East and Central Africa. The growth was attributed to a 53% increase in customer deposits which grew to Kes 741 billion up from Kes 483 billion.
The group recorded a 71 % growth in long-term debt financing to Kes 97 billion from Kes 57 billion with shareholders’ funds growing by 24% to Kes 139 billion up from Kes 112 billion.
Cash and cash equivalents in the group grew by 186% to Kes 247 billion up from Kes 86 billion. Investment in Government securities grew by 26% to Kes 217 billion up from Kes 172 billion.
Net interest income grew by 23% to Kes 55 billion up from Kes 45 billion driven by a 30% growth on customer loan book and 26% growth in investment in Government securities.
Non-funded income in the group grew at 27% to reach Kes 38 billion up from Kes 30 billion to contribute 41% of the total income. Forex trading income also grew by 77% to stand at Kes 6.2 billion up from Kes 3.5 billion.
Additionally, total operating costs grew by 67% to Kes 71 billion during the financial year ended 30th December 2020 up from Kes 42.5 billion in 2019. The boost was attributed to a 496% growth in gross loan provision of Kes 26.6 billion up from Kes 5.3 billion in the prior year, therefore increasing the cost of risk to 6.1% up from 1.3% in 2019.
However, the group was not immune to the effects of the global pandemic COVID-19 with the profit after tax declining by 11% to kes 20.1 billion during the period ended 30th December 2020.
Equity Group Managing Director and CEO Dr James Mwangi said the world was trying to regain its memory from the previous global pandemic hence making 2020 an exceedingly difficult and challenging year.
“Our corporate purpose of ’Transforming lives, giving dignity and expanding opportunities for wealth creation’ became the guiding compass of the organization’s essence on how to navigate through the crisis and the challenging environment. Our results and performance became a human story of resilience and determination to live an ethical human purpose.” Dr James Mwangi, Equity Group Managing Director and CEO.
The Group Board of Directors did not recommend payment of an interim divided for the year ended 31st December 2020.
Equity Group Outlook
With the development of COVID-19 vaccines and the world embracing vaccination, the Group is optimistic that the health crisis caused by COVD-19 will in time be brought under control.
The global economy as projected by the World Bank and the International Monetary Fund to register over 5% GDP growth rate, we are optimistic of the opportunity for the Group to bounce back.