Equity Group six month profit up 18pc to Sh11b

Equity Group six month profit up 18pc to Sh11b

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BY KORIR JUMA,NAIROBI,16TH AUG 2018-Equity Group recorded  a profit of Sh11 billion for the six months to July 2018, an 18 percent growth compared to the Sh9.4 billion it declared in 2017.

The Group’s balance sheet registered a growth of 7 per cent to reach Sh542 billion driven by growth in customer deposits of 9 percent to reach Sh394 billion up from Sh363 billion.

Regional subsidiaries contributed 26 percent of Group assets while international lenders increased their long-term funding to the Group by 16 percent to reach Sh53 billion up from Sh46 billion signifying the global lenders confidence in the Group’s risk.

Regional subsidiaries grew their profitability by 62 percent to Sh2.8 billion enhancing their contribution to the Group’s profitability to 18 percent up from 13 percent.

On the back of interest rate capping that has squeezed lending to the private sector, the group increased investment in government securities which grew by 37 percent to reach Sh159 billion up from Sh116 billion compared to net loans to customers which grew by 4 percent to reach Sh275 billion up from Sh265 billion.

Equity Group Chief Executive Officer James Mwangi is optimistic that positive developments in the region, especially a peace deal in South Sudan and easing of political and regulatory pressures in Kenya, will propel the group’s growth prospects.

“Kenya’s proposal to repeal interest capping and focus on the Big 4 Agenda of stimulating the real economy through investment in manufacturing, affordable low-cost housing, universal affordable health and transformation of agriculture value chain to achieve food security is bound to stimulate significant economic activities given the stable macro-economic environment,” says Mwangi.

According to the results ,non-funded income fees, and commissions grew by 2 percent primarily driven by 29 percent growth in trade finance income and 23 percent growth in merchant banking commission.

Mwangi says 97pc of the Group’s transactions are carried outside the branch with mobile devices processing the lion share of 78pc of transactions while agents process 12pc of transactions primarily acting as bridges of converting cash into digital money through deposits and vice-versa through withdrawals.

“93 percent of all successful loan applications are received and processed through mobile lending channels.”

 

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