Equity Bank CEO and Kenya COVID-19 Health Committee Chair Dr. James Mwangi. [Wilberforce Okwiri] Earnings fell 14 per cent on bad loans as Covid-19 negatively impacted the lender’s business.
Equity Group has posted a 14 per cent drop in profit after tax for the third quarter of 2020.
The bank reported profit of Sh14.8 billion for the nine months, down from Sh17.3 billion over a similar period last year Read More
According to the company’s financial statements for the period ended September, the fall in earnings was driven by a spike in bad loans as the Covid-19 pandemic disrupted many businesses across the country.
The value of non-performing loans spiked 69 per cent from Sh30.5 billion last year to an all-time high of Sh51.7 billion as at the end of September.
James Mwangi, Equity Group chief executive said the company had adapted its strategy to support customers and staff adversely affected by the global pandemic.
“We grew our loan book by 30 per cent year on year in order to support our customers who saw opportunities of green shoots and diversification in the Covid-19 environment,” he said in a statement after releasing the results.
“Most of the new opportunities we funded were in manufacturing of PPE (personal protective equipment), logistics, online businesses, agro-processing, fast moving consumer goods and agriculture value chains.”
Net loan and advances to customers stood at Sh302 billion, up from Sh263 billion recorded last year, with the lender’s loan loss provision standing at Sh14.7 billion, up from Sh1.8 billion last year.
“Customer deposits registered a 45 per cent growth from Sh478 billion to Sh691 billion driven by 51 per cent growth in Uganda, 21 per cent growth in Kenya and an additional Sh130 billion from the acquisition of BCDC in DRC,” the bank said.
Total interest income rose 23 per cent from Sh42.7 billion last year to Sh52 billion this year, while non-interest income rose by Sh2 billion to Sh24.8 billion.The results paint a mixed performance for the lender that is among the top 10 most traded equities at the Nairobi Securities Exchange.In addition to this, the company continues to ramp up its digital offering, with the majority of transactions now conducted outside the physical branch network.According to the latest results, mobile banking now accounts for 83 per cent and 59 per cent of overall transactions and value respectively.Equity Group further said its regional strategy to diversify earnings from other territories and reduce reliance on […]