Equity Group has reported 11.8pc increase in profit after tax which rose to Ksh 28.5 billion in six months of the year to June 2024 from Ksh 25.5 billion the lender reported over the same period last year.
The lender attributes the growth to higher income which surged to Ksh 97.1 billion from Ksh 82.9 billion supported by trade finance despite a decline in forex earnings which dropped to Ksh 6.6 billion from Ksh 8.4 billion.
“This has been a very difficult time for forex earnings. They are down by Ksh 2 billion but because of trade finance we are holding up returning growth of total income of 16pc,” said Dr James Mwangi during Monday investor briefing.
Equity Group net interest income grew 22pc to Ksh 84.8 billion from Ksh 69.8 billion reported over the same period last year despite high inflation and interest shocks. This saw interest expenses grow 30pc to Ksh 30.4 billion from Ksh 23.4 billion.
On the other hand, the lender’s non-funded income increased to Ksh 42.8 billion from Ksh 36.5 billion.
Equity Group net loans and advances during the same period slowed from Ksh 817.2 billion to Ksh 791.1 billion, a 3.2pc decline. This is owing to customs reducing their borrowing due to high interest rates and volatility in the exchange rate.
The bank also reported a rise in gross non performing loans which increased from Ksh 97.5 billion to Ksh 119.9 billion prompting the lender to increase its loan loss provision by 47.9pc to Ksh 10.5 billion from Kh 7.1 billion.
According to Dr Mwangi this has stabilized from 13.2pc in the fourth quarter of last year due to defensive approach to enhance loan loss coverage.
“We may be strained in terms o NPL like any other, but at 12.9pc compared to 16.3pc the Kenya banking Industry average, the bank is performing at least 350 basis points better than the industry,” He stated.
During the period, the group’s total assets grew by 6pc to Ksh 1.75 trillion from Ksh 1.64 trillion recorded over the same period last year with regional subsidiary accounting for 49.7pc.
Dr Mwangi also revealed that Equity Group has received approved in principal to venture into health insurance. The bank through its Equity Insurance currently offers life and general insurance.
The insurance subsidiary reported a 27pc rise in insurance service revenue to Ksh 812 million to Ksh 1.03 billion.
