Equity Group Holdings Plc has announced a 98% growth in half-year profits to Kshs 17.9 billion up from Kshs 9.1 billion the previous year.
Equity Group managing director and CEO Dr James Mwangi said the defensive and offensive strategy adopted 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 offensive growth strategy saw deposits register a 51% growth to Kshs 820.3 billion up from Kshs 543.9 billion, while long term borrowed funds grew by 78% to Kshs 102.3 billion up from Kshs 57.6 billion.
Net Loans and advances grew by 29% to Kshs 504.8 billion up from Kshs 391.6 billion, while investment in government securities grew by 46% to Kshs 315.5 billion up from Kshs 216.4 billion – resulting in 50% growth in total assets to Kshs 1.12 trillion up from Kshs 746.5 billion.
The aggressive growth strategy effected by the Group resulted into a 33% growth in topline total income to Kshs51.6 billion up from Kshs 38.7 billion driven by a 26% growth in net interest income of Kshs 31.2 billion up from Kshs 24.6 billion and a 45% growth in non-funded income of fees, commission and transactions to Kshs 20.4 billion up from Kshs 14.1 billion.
DEFENSIVE APPROACH
The defensive approach focused on high asset quality, strong capital and liquidity buffers that saw the Group present a strong non-performing loans (NPL) coverage of 92% up from 73% the previous year attributed to a decline in gross non-performing loans by Kshs 1.3 billion from Kshs 61.2 billion to Kshs 59.9 billion.
Loan loss provision declined by 66% from Kshs 7.7 billion to Kshs 2.6 billion to register cost of risk of 1.2% down from 4.2%. Net non-performing loans declined by Kshs 5.4 billion from Kshs 28.3 billion to Kshs 22.9 billion due to the aggressive provisioning the previous year under the defensive strategy.
Of the Kshs 171 billion Covid-19 restructured loan book, Kshs 162 billion is categorized as performing with Kshs 103 billion having resumed repayments, Kshs 6 billion fully repaid, Kshs 92 billion up to date in repayment and Kshs 5 billion non performing. Only Kshs 64 billion remains under Covid-19 moratorium constituting only 11% of the entire loan book.
Total operating costs grew by 4% to Kshs 27.8 billion against a 33% growth in total income to Kshs.51.6 billion driving profit before tax up to Kshs.23.8 billion up from Kshs.12 […]