Finance
Equity Group Holdings Plc has recorded a half-year Profit after Tax of Sh29.6 billion representing a 12 profit with earnings per share going up to Sh7.6 up from Sh6.7.
The Group also recorded balance sheet growth of 6 percent which is above the prevailing inflation rate of 4 percent, bringing its total assets, as at June 30, 2024, to Sh1.75 trillion with the regional subsidiaries accounting for 49.7 percent.
The Group has seen its deposit franchise grow by 11 percent yearly to Sh1.3 trillion with its customer base now at Sh20.7 million. Consequently, this growth in deposits has resulted in a 55 percent increase in cash and cash equivalents to Sh341 billion and growth in investment securities to Sh459 billion resulting in an overall strong liquidity position of 57 percent.
While releasing the half year results, Dr. James Mwangi Equity Group Holdings Managing Director and Chief Executive Officer (CEO) said the Group is optimistic that the strong liquidity of the Group has positioned it to effectively support their customers as the economy starts showing signs of improvement in the key markets.
“With the improved liquidity, the Group continued to optimize its balance sheet reducing leverage by Sh75 billions of expensive borrowings,” announced Dr. Mwangi.
He added that the shareholders’ funds grew by 13 percent to Sh220 billion strengthening the Group’s ability to underpin the private sector led Africa Resilience and Recovery Plan (ARRP) by investing in new subsidiary undertakings in the Insurance Group as well as positioning it well to continue to take advantage of any market opportunities similar to the acquisition made in Rwanda in 2023.
The CEO outlined the robust growth of the group with interest income growing by 22 percent to Sh84.8billion from Sh69.8billion despite the high inflation and high interest shocks which saw returns to customers in the form of interest expense grow by 30 percent to Sh30.4 billion from Sh23.4 billion.
“Non-funded income continues to grow steadily increasing by Sh5 billion and yielding a total income growth of 16 percent to Sh95.1 billion, up from Sh82.1 billion years on year,” he said.
He continued: “We are proud that the Group has sufficient cushion on its key balance sheet buffers being liquidity, capital and NPL coverage while at the same time it continues to report above industry profitability metrics with return of average equity of 26.7 percent and return on average assets of 3.4 percent.
The CEO highlighted the dominance of digital channels with 84 percent of transactions, Agency channels processed 9 percent of transactions, ATMs and Merchant Acquiring each processed 2 percent of transactions while branches only handled 3 percent of transactions, rolling out a common product house that allows cross selling and bundling of products under the One Equity offering.
Mwangi recalled that on August 8, 2024, EGH commissioned 113 Equity Leaders Program (ELP) scholars from Kenya, Rwanda, Uganda and DRC who have received full scholarships to pursue their university education in various global universities across the world. The scholarships, worth Sh2.8 billion (USD.2.7 million) saw 13 students admitted to Ivy League universities,
“Despite the challenging environment, Equity has chosen to operate in a sustainable manner. In the coming weeks the Group will release its third sustainability report that highlights the Group’s approach to embed Sustainability in its strategy by becoming an early adopter of Taskforce for Nature Finance Disclosure in Africa, demonstrating not only a sustainability focus at customer level but also supporting nature restoration by having achieved 29.5 million trees planted,” stated Mwangi.
Against a backdrop of continued macroeconomic headwinds of high interest rates and volatile exchange rates across the markets that the Group operates in, he maintained that Equity Group Holdings Plc continues to demonstrate resilience.