Nairobi — Equity Group has registered a decline in profit after tax by 14 percent to Sh5.3 billion in the first quarter of the year, attributable to a tenfold increase in its loan loss provision to Sh3 billion. A year earlier, its provisions on loans were Sh300 million.
In a statement, Dr. James Mwangi, Group Managing Director and CEO, said the global COVID-19 pandemic had introduced unprecedented uncertainty within the global financial systems prompting the bank to adopt a conservative approach. As such, the bank has had to fortify its balance sheet and assuring ample liquidity to support its customers.
The Group’s total assets registered a 14 percent year on year growth to Sh693.2 billion from Sh605.7 billion driven by a 17 percent growth in customer deposits to Sh499.3 billion from Sh 428.5 billion.
Net interest income grew by 11 percent on the back of a 24 percent year on year growth on loan book to Sh379.2 billion up from Sh305.5 billion, which reflected strain with the non-performing loan book growing to 10.9 percent up from 9.1 percent the previous year.
Aggressive provisions saw the cost of risk rising to 3.24 percent up from 0.37 percent.
The Group’s total income grew by 13 percent to Sh19.7 billion up from Sh17.5 billion for the same period last year. Non-funded income grew by 16 percent outpacing the 11 percent growth on net interest income thereby increasing its contribution to 42 percent of the Group’s total income.
Forex trading income grew by 34 percent to Sh1.1 billion up from Sh 815 million with 26.5 percent of the volume traded contributed by diaspora flows. Diaspora remittances commissions grew by 22 percent to Sh234 million up from Sh192 million the previous year with the volume of diaspora remittances growing by 31 percent to reach Sh40.6 billion up from Sh30.9 billion the previous year.
Merchant banking commission grew by 11 percent to Sh582 million up from Sh523 million the previous year with Merchant banking volume reaching Sh29 billion up from Sh25.6 billion.
Mwangi said the group is still registering progress in transforming itself from the place you go to something you do on devices. As such, the brick and mortar infrastructure of branches and ATMs processed only 6 percent of the Group’s banking transactions, while mobile and internet banking processed 79 percent of all transactions, with agents and merchants processing 15 percent of transactions making the Group an increasingly virtual digital financial service […]
