Equity Bank Group MD Dr. James Mwangi during distribution of PPEs to the Mathari National Teaching & Referral Hospital on August 14, 2020. PHOTO | COURTESY Equity Group Holdings PLC (EGH) has announced its half year results for the period ended June 30, 2020 reflecting a 24% decline in profitability.
Profit declined from Ksh.12.0 billion to Ksh.9.1 billion for the corresponding period the previous year.
“Despite NPLs showing a minimal decline from 10.9% to 10.7% quarter on quarter basis and stabilizing below the 13.1% industry average, prudence dictated that we adopt a conservative humble approach in recognizing the risk of uncertainty Covid-19 has imposed on the operating environment” said Dr. Mwangi, The Group Managing Director and CEO while releasing the results.
Top line net interest income was up 17% to Ksh.24.6 billion up from Ksh.21.1 billion the previous year driven by a 22% growth in loan book from Ksh.320.9 billion to Ksh.391.6 billion.
Non-funded income declined by 3% from Ksh.14.5 billion to Ksh.14.1 billion as a result of the waiver of mobile transaction fee in Kenya since April 2020 to drive behavior change towards virtual banking enabled by mobile technology; and lower transactional activity given weak economic activity.
Customers shied from use of Merchant Banking and Agency Banking as transactional channels with merchant transactions stagnating as commissions declined by 10% from Ksh.103.3 million to Ksh.93.3million.
“We assessed that the Covid-19 health pandemic would be a medium-term situation until a pharmaceutical solution or vaccine was found. The health protocols of coping and managing by staying at home, social distancing, washing hands and sanitizing while wearing masks would disrupt production, shock supply chains and degenerate into an economic crisis. On this basis, we resolved to prioritize the safety and health of our staff and customers first, and protecting livelihoods by supporting enterprises to survive, adapt, recover and subsequently thrive. In light of the markets we operate in being characterized by a thriving real estate, tourism, travel, private education, transport, logistics, trade and commerce, we have determined that 45% of our clients’ loans would need flexible accommodation on loan repayments. Our future as a bank will be defined by who we support our customers both individuals and enterprises to become,” said Dr. Mwangi.
Agency cash in cash out transaction volume declined by 20% from Ksh.54.031 billion to Ksh.42.975 billion with resultant commission declining by 25% from Ksh.1.055 billion to Ksh.789 million.
However, retail digital commerce payments Eazzy Pay and Pay […]