Equity Group Reports 12.5% Profit Growth in H1 2024 Amid Economic Challenges
Equity Group, Kenya’s largest bank by market capitalization, has posted a 12.5% increase in net profit for the first half of 2024, despite facing challenging macroeconomic conditions that led to higher loan defaults among businesses and individuals.
On Monday, the bank reported a net profit of $229 million (KES 29.6 billion), up from $203.4 million (KES 26.3 billion) in the first half of 2023. This growth was driven by a strong performance in interest income, which rose by 22% to $656 million (KES 84.8 billion), even as inflation and interest rates remained high.
Equity Group’s robust performance comes at a time when leading Kenyan banks are focusing on regional expansion to counter the slowing growth in East Africa’s largest economy. James Mwangi, the group’s managing director and CEO, highlighted the bank’s shift towards becoming a regional entity, noting that nearly half of the bank’s balance sheet and profit and loss now originate from outside Kenya.
Mwangi emphasized that the bank’s regional subsidiaries have significantly contributed to its overall efficiency, accounting for 47% of the group’s balance sheet in terms of deposits and loans, and driving a 55% growth in revenue.
The bank also recorded a 16% increase in non-interest income, reaching $737.2 million (KES 95.1 billion). Customer deposits saw an 11% year-on-year growth to $10 billion (KES 1.3 trillion), with the bank’s customer base expanding to 20.7 million.
This growth in deposits led to a 55% increase in cash and cash equivalents, amounting to $2.6 billion (KES 341 billion), along with a rise in investment securities to $3.5 billion (KES 459 billion), strengthening the bank’s liquidity position.
However, the bank’s gross non-performing loans (NPLs) grew by 4.4% to $929.4 million (KES 119.9 billion), prompting an increase in provisions for loan defaults by 35% to $65.8 million (KES 8.5 billion).
