Equity Group, Kenya’s largest bank by market capitalization, has reported a strong 12.5% growth in net profit for H1 2024, achieving a Profit after Tax of Kshs.29.6 billion. This solid performance comes despite challenging macroeconomic conditions, including high interest rates and volatile exchange rates across the regions where the Group operates.
Regional subsidiaries played a pivotal role in this success, contributing 50.2% of the Group’s profit before tax. Equity Group’s robust capital position is evident, with a core capital ratio of 15.8% and a total capital ratio of 18.4%, both well above regulatory thresholds. The Group’s deposit base also saw significant growth, increasing by 11% year on year to Kshs.1.3 trillion, further strengthening its liquidity position to an impressive 57%.
CEO Dr. James Mwangi emphasized the importance of the Group’s strong liquidity in supporting customers as economic conditions begin to improve in key markets. He highlighted the Group’s strategic decision to optimize its balance sheet by reducing Kshs.75 billion of expensive borrowings, further solidifying its financial position.
The Group’s shareholder equity grew by 13% to Kshs.220 billion, while interest income rose by 22% to Kshs.84.8 billion. Despite facing high inflation and interest rate shocks, Equity Group continued to generate robust returns, with non-funded income increasing by Kshs.5 billion and total income growing by 16% to Kshs.95.1 billion.
Equity Group’s strategy of regional and product diversification continues to pay off, with the Kenyan banking subsidiary now contributing 43% of revenue, down from 46% in the previous period. The growth in the DRC and synergies from the Cogebanque acquisition in Rwanda have resulted in subsidiaries accounting for 47% of total loans and 51% of profit after tax.
The Group remains committed to a conservative and prudent approach in a challenging operating environment. Loan loss provisions have increased by 35% to Kshs.8.5 billion, maintaining a healthy NPL coverage ratio of 70% and an NPL ratio of 12.9%, well below the industry average. The Group’s continued investment in infrastructure modernization and its strategic focus on sustainable growth positions it well for the future.
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