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This was supported by 8.6 percent year on year growth in Net interest income to Sh45.0 Billion, coupled with 19 percent rise in non-interest revenue to Sh30.8 billion/COURTESY

Coronavirus

Equity posts a 14pc rise in net profits to hit Sh22.6bn

NAIROBI, Kenya, Mar 20 – Equity Group Holdings has reported a 14 percent year on year growth in FY19 Profit after Tax to Sh22.6Bn, compared to Sh19.8 billion in 2018.

This was supported by 8.6 percent year on year growth in Net interest income to Sh45.0 Billion, coupled with 19 percent rise in non-interest revenue to Sh30.8 billion.

Consequently, non-interest revenue contribution rose 219 basis points to 40.6 percent.

“Execution of the Group’s business strategy continued to yield results as non-funded income contributed 40 percent of the Group’s total income reflecting quality and diversification of income. Success in our regional expansion and business diversification saw subsidiaries contribution to Group profit after tax rise to 18 percent up from 15 percent the previous year,” James Mwangi, Managing Director and CEO said.

The loan book grew 23.3 percent to Sh366.4 billion with 97 percent of transactions occurring outside the branch, while investment in government securities rose 7.0 percent to Sh172.2 billion.

Cost-to-Income (CTI) was relatively unchanged year on year at 51.5 percent.

In Kenya, Cost-to-income clocked 45.7 percent as the bank has heavily leveraged on its mobile, online, agency and digital platforms in the country.

Management is targeting to push the branch numbers further lower in Kenya with branches envisaged to serve high-value transactions for SMEs, corporates, wealth management, and advisory.

Analysts at Genghis Capital anticipate CTI to settle at sub 50 percent levels as the bank recovers from one-off costs (KES 1.8Bn) witnessed in 2Q19 on account of an ATM network upgrade.

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A final dividend of KES 2.50 was declared to mark a 25 percent increase from the previous year.

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