Subsidiaries help lift Equity Bank Q3 net profit to $242m

Subsidiaries help lift Equity Bank Q3 net profit to $242m

Equity Group CEO James Mwangi. PHOTO | FILE | NMG Equity Group has recorded a 79 percent rise in net profit in the nine months to September this year, helped by growth in interest and non-interest income.

The regional lender’s profit after tax in the review period stood at Ksh26.87 billion ($242.07 million) compared to Ksh15.04 billion ($135.49 million) the year before.

“The bulk of this growth has come from our subsidiaries. We continued with our regional expansion. We felt that that is where the offensive strategy could play best,” the Group’s chief executive James Mwangi told an investor briefing in Nairobi on Monday.

“We have seen some of our subsidiaries like Uganda growing its deposits by 47 percent and its asset base by 43 percent and beaten by EquityBCDC in the Democratic Republic of Congo (DRC) which have grown their deposits 51 percent and their assets by 47 percent and for the first time we now see Kenya reduced to contributing only 58 percent of our total deposits and subsidiaries contributing 42 percent.”

The lender, which is listed on the Nairobi Securities Exchange (NSE), has a presence in six countries — Democratic Republic of Congo (DRC), Kenya, Uganda, Tanzania, South Sudan, Rwanda, and a representative office in Ethiopia.

It has also established a regional office for its Central and Southern Africa operations.

Its total operating income grew by a quarter to Ksh80.45 billion ($724.77 million) from Ksh64.12 billion ($577.65 million) as its loan book and investments in government debt increased.

Its interest income on loans and advances grew by 24 percent to Ksh44.83 billion ($403.87 million), while that from government securities increased by 34 percent to Ksh20.66 billion ($186.12 million).

Equity increased its investment in treasury bills and bonds by 62 percent to Ksh361.3 billion ($3.25 billion) from Ksh222.84 billion ($2 billion) during the period under review.

Non-interest income jumped by 28.85 percent to Ksh31.97 billion ($288.01 million) from Ksh24.81 billion ($223.51 million), while loan loss provisions declined by 68 percent to Ksh4.6 billion ($41.44 million) from Ksh14.3 billion ($128.82 million).

Customer deposits grew by 27 percent to Ksh875.11 billion ($7.88 billion) from Ksh691.03 billion ($6.22 billion), while the loan book accelerated by 23 percent to Ksh559.01 billion ($5.03 billion).

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