NAIROBI, Kenya, Mar 10 – Equity Group Holdings Limited has recorded a 29 percent rise in its net profit in 2014 to Sh17.2 bilion compared to Sh13.3 billion posted in 2013.
The Group Chief Executive Officer James Mwangi attributed the growth to good performance of its regional subsidiaries during the year under review.
“Our regional subsidiaries have actually outperformed Kenya, growing their profit contribution by 346 percent. We have also seen the initiative like merchant banking growing their income by 66 percent. Diaspora remittances also grew by 25 percent,” Mwangi said during an investor briefing on Tuesday.
The regional subsidiaries are in Rwanda, South Sudan, Tanzania and Uganda.
The company’s deposits grew by 26 percent in 2014 to Sh245.6 billion from Sh194.8 billion in the previous year. This contributed to an increase in the group’s balance sheet to Sh345 billion up from Sh278 billion in the previous year.
During the period, Equity successfully completed its reorganisation which saw the creation of a listed non- operating holding company, Equity Group Holdings Limited following the hiving off of the banking business in Kenya to a new subsidiary- Equity Bank Kenya Limited.
“The restructuring and other related one off set up costs impacted the cost income ratio adversely resulting in an increase in the cost income ratio from 48 percent to 52 percent,” Mwangi said.
The re-organisation was aimed at enhancing the capital utilisation within the organisation as well as de-risk the subsidiaries from each other.
Total operating expenses grew went up to Sh26.3 billion from Sh22.7 billion recorded in 2013.
Following the company’s improved performance, shareholders will take home a dividend of Sh1.80 per share.