Earnings UpdateEquity Group’s Records a 79% Rise in Profit to Kes 26.9 Billion in Q3 2021

Equity Group Holdings Plc has posted an increase of 85% in Pre-tax profit to Kes 36.6 Billion in the third quarter period ended 30th September 2021. This is compared to a Pre-tax profit of Kes 19.7 Billion in the same period in 2020.

The lender saw its net earnings increase 79% from Kes 15.0 Billion to Kes 26.9 Billion. The bulk of this growth came from its subsidiaries with total assets recording a growth of 27% and a 25% growth in total income, Dr James Mwangi, the Managing Director Equity Group told an investor briefing this Monday while releasing the Q3 financials.

Dr Mwangi also noted that regional subsidiaries grew their group contribution to deposits to 42% up from 40%, revenue to 37% up from 30% and profit before tax to 26% up from 21%.

Equity Group’s profitability-as measured by Earnings per Share (EPS) also improved significantly quarter on quarter from Kes 4.65 in Q2, 2021 to Kes 6.98 in Q3, 2021.

Equity Group saw its balance sheet size grow to Kes 1.2 Trillion in Q3 2021 compared to Kes 1.1 Trillion at the end of the period ended 30th June 2021. Net loans to customers increased from Kes 504 Billion to Kes 559 Billion between June and September while customer deposits rose from Kes 819.7 Billion to Kes 875.1 Billion during the period under consideration.

Total interest income from loans, investment in government paper as well as earnings from deposits with other banking institutions, increased from Kes 42.7 Billion in Q2, 2021 to Kes 67 Billion at the end of September this year. The Group’s earnings from fees and commissions on loans to customers nearly doubled from Kes 3.5 Billion to Kes 5.7 Billion between June and September 2021.

Income from foreign exchange trading activities increased from Kes 4.1 Billion in June to Kes 5.6 Billion at the end of September 2021, bringing total non-interest income from fees and commissions on loans and forex trading as well as other income to Kes 31.9 Billion in Q3 from Kes 20.8 Billion in Q2, 2021.

Equity Group’s operating expenses, however, went up significantly from Kes 28.1 Billion in Q2 to Kes 43.8 Billion in Q3, pushed up by rising staff costs due to recent acquisitions in the region, the latest being in the Democratic Republic of Congo (DRC).

With Kenya’s economy in a recovery mode from the effects of the COVID-19 pandemic, the level of non-performing loans is getting lower for most lenders.

“We create solutions that are relevant to the evolving needs of the economy and our solutions are salient to our consumers.”

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