Equity Group Holdings will resume dividend payments to shareholders after a two-year freeze following a 98 percent growth in net profit during the first six months to June.
The regional bank, which is bullish of a sustained profit trajectory, has also diversified into new lines of business including trade financing, insurance and derivatives with hopes of shoring up its total income which grew by 33 percent to Ksh51.6 billion ($473.39 million) in the period under review.
The Nairobi Securities Exchange (NSE) listed lender made a profit after tax of Ksh17.9 billion ($164.22 million) compared to Ksh9.1 billion ($83.48 million) in the first half of 2020.
The record performance was largely boosted by investment in government securities, increased revenues on banking transactions and a significant reduction in loan loss provisions.
Equity’s investment in government securities stood at Ksh315.5 billion ($2.89 billion), constituting 28 percent of the group’s total assets of Ksh1.12 trillion ($10.27 billion).
Subsidiaries
Profit from its regional subsidiaries save for South Sudan also increased led by the Democratic Republic of Congo (Ksh1.6 billion, $14.67 million), and followed by Uganda (Ksh1.3 billion,$11.92 million), Rwanda (Ksh800 million, $7.33 million) and Tanzania (Ksh100 million, $917,431.19).
Its South Sudan business made a loss of Ksh500 million ($4.58 million).
The bulk of the lender’s profit (Ksh14.4 billion, $132.11 million) was generated by the Kenyan operations that hold 40 percent (Ksh448 billion, $4.11 billion) of the Group’s total assets currently standing at Ksh1.12 trillion ($10.27 billion)
"The defensive and offensive strategy adopted by the Group at the onset of the Covid-19 pandemic to create resilience, agility and recovery has been very effective in positioning, navigating and driving performance," the Group’s Chief Executive James Mwangi told an investor briefing in Nairobi on Tuesday.
DividendAccording to the Group’s unaudited financial statements, net interest income and non-funded income increased by 26 percent and 45 percent to Ksh31.2 billion ($286.23 million) and Ksh20.4 billion ($187.15 million) respectively. The increase was largely drawn from fees and commissions and interest in government securities.With the good performance, the lender has committed to resume dividend payout this year."In terms of dividend policy I think the board pronounced itself and we took a policy to the shareholders during the annual General Meeting (AGM)," said Mr Mwangi."It committed to a payout of between 30 and 50 percent of profit after tax that is available for distribution annually. So it is no longer speculative we have gone back to dividend payout starting this year (2021) […]