Equity Bank Holdings Ltd recorded a 14 per cent decline in net profit for the three months to March 31, 2020. PHOTO | DENNIS ONSONGO | NATION MEDIA GROUP The Nairobi Securities Exchange-listed lender saw its profit after tax fall to Ksh5.28 billion ($52.8 million) from Ksh6.15 billion ($61.5 million).
The management took a conservative approach to surviving the economic downturn by increasing loan loss provision by Ksh3.11 billion ($31.1 million) from Ksh409.89 million ($4.09 million) in the same period last year.
Equity Bank Holdings Ltd recorded a 14 per cent decline in net profit for the three months to March 31, as a result of increased loan loss provisioning to cushion businesses against uncertainties caused by the Covid-19 pandemic.
The Nairobi Securities Exchange-listed lender saw its profit after tax fall to Ksh5.28 billion ($52.8 million) from Ksh6.15 billion ($61.5 million). The management took a conservative approach to surviving the economic downturn by increasing loan loss provision by Ksh3.11 billion ($31.1 million) from Ksh409.89 million ($4.09 million) in the same period last year.
Equity’s regional subsidiaries in Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo accounted for a combined 26 per cent of the group’s bottom line, compared with 17 per cent in the same period last year.
The Covid-19 pandemic has hit global economies, paralysing economic activities and pushing households into financial distress.
“The global Covid-19 pandemic has mutated into a global economic crisis, occasioned by a sudden standstill of economic activity as a result of the global lockdown. This has introduced unprecedented uncertainty within the global financial systems prompting us to adopt a conservative approach, fortifying our balance sheet and assuring ample liquidity to support our customers,” said Equity Group chief executive James Mwangi.
According to Mr Mwangi, the Group’s business model of high-volume low margins with non-funded income contributing 42 per cent of total revenues and a low cost of funding enables the bank to navigate a period of compressed interest margins on loans and advances and other interest earning assets.
The group’s total income grew 13 per cent to Ksh19.85 billion ($198.5 million) from Ksh17.61 billion ($176.1 million), with regional subsidiaries’ combined contribution to total revenues increasing to 30 per cent from 28 per cent in the same period last year.
According to the group’s unaudited financial statements released last week, total interest income grew 14 per cent to Ksh15.42 billion ($154.2 million) from Ksh13.49 billion ($134.9 million) and […]
