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Equity Group Holdings Reports Record Profits, Reinforces Regional Leadership Position

By Our reporter

Equity Group Holdings, a leading Kenyan financial services company, has announced impressive first-quarter results for the period ending March 31, 2024, showcasing a remarkable 25% surge in profit after tax to a record Kshs.16 billion compared to the same period last year. This exceptional performance has been attributed to the company’s robust leadership decisions and agile balance sheet management, which facilitated a swift recovery.

Key strategic moves included bold actions to bolster deposit placements by 11%, in contrast to a previous year’s growth rate of 29% by the end of 2023. Additionally, the Group strategically managed its long-term borrowed funds, resulting in a notable 21% decline year-on-year, as it prioritized the repayment of expensive dollar-denominated loans nearing maturity.

To mitigate elevated credit risks amidst a challenging non-performing loans environment, Equity Group enhanced its credit risk underwriting standards. This led to a modest 3% growth in the loan book by March 31, 2024, compared to a significant 26% growth rate recorded by the end of December 2023. Furthermore, the Group reallocated lending from the private sector to public sector investments, particularly in government securities, which grew to 21%. As a result, the cost of credit risk decreased to 2.9% for the period ending March 31, 2024, down from 4.4% by the end of December 2023.

Efficiency pursuits at the operational level contributed to a decline in total costs growth from 52% in the preceding year to 28% for the quarter ending March 31, 2024. Moreover, the Group’s strategic focus on digitization and process automation significantly enhanced customer convenience and reduced operational fixed costs.

With a strong liability franchise comprising 20 million deposit customers contributing Kshs 1.236 trillion, Equity Group has demonstrated its resilience and adaptability, evolving from a Kenyan banking leader to a regional financial services powerhouse. The Group’s diversified loan portfolio of Kshs.779 billion spans various sectors, with significant allocations to corporates, small and medium enterprises, retail, consumer, and public service institutions across the real economy.

Equity Group’s regional subsidiaries played a pivotal role, contributing 63% of the Kshs.20.4 billion profit before tax, solidifying its position as a regional banking leader with a commendable return on average equity of 27.6%. The Group’s expansion beyond financial inclusion has yielded significant non-funded income, with contributions from treasury and trade finance activities.

The success story extends to Equity Group’s burgeoning life insurance business, which witnessed robust growth in its second year of operations, underscoring the immense potential in providing innovative insurance solutions to underserved markets.

Driven by a strong purpose to transform Africa through its Africa Recovery and Resilience Plan, Equity Group continues to evolve its brand from a focus on financial inclusion to one that fosters dignity, changes lives, and expands opportunities for wealth creation. Recognized with numerous awards for its impactful initiatives, Equity Group remains poised to capitalize on the global economic recovery, leveraging its strengthened commercial capabilities and strategic positioning within East Africa’s vibrant trade ecosystem.

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