Equity nine months profit falls to Ksh.14.8 billion as COVID19 effects on economy bites

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BY KORIR JUMA,NAIROBI,12TH NOV 2020-Equity Group has reported a 17 per cent profit decline in nine months to September 30 with earnings sliding to Ksh.14.8 billion from Ksh.17.3 billion.

The profit decline is largely attributable to increased loan defaults cover with the bank’s loan-loss provisioning costs growing by eight fold to Ksh.14.8 billion from Ksh.1.9 billion last year.

The increased provisions have pushed the lender’s total operating costs by 43 per cent to Ksh.58.1 billion from Ksh.40.5 billion last year.

Similarly, the bank’s stock of bad loans represented in the gross non-performing loans portfolio have soared by 170 per cent to Ksh.51.8 billion from Ksh.30.5 billion last year.

The dual growth in provisions and NPLs is largely attributable to elevated borrowers’ risks as occasioned by the COVID-19 pandemic which has crippled the country’s economic prospects.

Equity Group has nevertheless expanded its revenues from operations recording a 17 per cent increase in total operating income to Ksh.64.1 billion from Ksh.54.8 billion last year.

The lender’s net interest income has expanded at a faster rate of 21.7 per cent to Ksh.39.3 billion ahead of non-interest funded income (NFI) which grew by 10.3 per cent to Ksh.24.8 billion.

Equity’s asset base has expanded to Ksh.933.9 billion with loans and advances to customers climbing by 30 per cent to Ksh.453.9 billion.

Meanwhile, customer deposits have grown to Ksh.691 billion from Ksh.478.1 billion last year.

The lender’s earnings per share (EPS) has subsequently fallen to Ksh.3.93 from Ksh.4.59 from the resulting profit decline.

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