Equity Group Holdings has reported a remarkable 25.1 percent surge in net profit for the first quarter ending March, soaring to Sh15.3 billion compared to Sh12.3 billion in the corresponding period last year.
The notable profit increase is credited to heightened income streams during the period, with the bank witnessing growth in both its interest and non-funded income categories.
Total operating income surged to Sh50 billion from Sh40 billion, with interest income experiencing the fastest growth at 32.7 percent, reaching Sh43 billion. This surge in interest income is primarily attributed to increased revenue from loans and advances to customers, which escalated to Sh27.3 billion from Sh20.7 billion previously.
Equity Group also saw a 21.3 percent boost in its non-funded income, reaching Sh22.2 billion from Sh18.3 billion. This increase was mainly fueled by higher fees and commissions, effectively offsetting a dip in foreign exchange trading income.
However, the bank experienced a 28.1 percent rise in total operating expenses to Sh29.6 billion from Sh23.1 billion, primarily due to a significant spike in loan provision costs, which soared by 76.4 percent to Sh6 billion from Sh3.4 billion.
This surge in provision costs coincides with a 50 percent increase in gross non-performing loans, which rose to Sh120.4 billion from Sh80.2 billion.
Equity Group’s asset base expanded to Sh1.685 trillion by the end of the quarter, with net loans and advances to customers rising by 14 percent to Sh1.195 trillion. Meanwhile, customer deposits grew by 11.2 percent to Sh1.236 trillion.
CEO James Mwangi attributed the bank’s stellar performance to its consistent execution of strategic initiatives, including business diversification and regional expansion. “The numbers speak for themselves. It’s a very strong recovery for the group over the last seven years amid multiple shocks including interest rate caps, the pandemic, and geopolitical risks,” he remarked.
