Equity Group CEO James Mwangi on November 22, 2022. PHOTO | DIANA NGILA | NMG
Equity Group’s net profit for the year ended December 2022 has increased by 15 percent from Sh40.07 billion to Sh46.1 billion, deepening its position as the
most profitable lender in the region.The profit growth came on the back of a rise in interest and non-interest income when the lender’s loan book expanded from Sh587.78 billion to Sh706.59 billion.
The bank’s Kenyan unit contributed Sh33.4 billion or 73 percent of the group’s net profits, even as its subsidiaries in markets such as DR Congo continued to grow.
The earnings growth means Equity Group has, for the third consecutive year, retained its spot as the most profitable lender in the market, with KCB Group’s net profit in the same period being Sh40.8 billion.
“Equity is not about numbers. It is a human story built to solve problems in the society. But this human story manifests itself in numbers. It is a story of consistency,” said James Mwangi, Group CEO at Equity, on Tuesday.
The lender has declared a dividend of Sh4 per share, a 33 percent rise from the Sh3 that was paid last year.
The dividend payout will amount to Sh15.1 billion—an equivalent of 33 percent of net earnings—in line with its dividend policy of distributing between 30 percent and 50 percent of its net profit to shareholders.
The dividend will be paid on or before June 30 to the members in the share register of the company on the closure of May 19. This is subject to approval at the annual general meeting to be held on June 21.
Equity’s net interest income grew by 25 percent from Sh68.8 billion to Sh85.99 billion, in line with the growth in the loan book by a fifth.
Non-interest income grew by 34 percent to Sh59.94 billion, mainly driven by trade finance, payment channels and foreign exchange trading income.
Operating costs rose from Sh61.5 billion to Sh86.09 billion as the lender increased provisioning for loan defaults and spent more on paying staff.
Provisioning for loan defaults tripled from Sh5.84 billion to Sh15.4 billion, while staff costs jumped from Sh19.11 billion to Sh24.78 billion.
“We have strengthened our bench (by hiring more staff). And also, when you are doing well, you have to pay them well. That explains why the staff costs have gone up. We are willing to pay for competency,” said Mr Mwangi.
Equity’s increased payout to shareholders is the latest indication that investors in listed banks are set for record cash returns after booking lower income in the 2020 and 2021 financial years.
Co-op Bank increased its dividend payout by 50 percent to Sh1.5 per share for the year ended December, marking the second-highest growth in cash returns among listed lenders that have published their results.
Absa Bank Kenya enhanced its payout by 22.7 percent to Sh1.35 per share or an aggregate of Sh7.3 billion.
Standard Chartered Bank Kenya, on the other hand, increased its dividend by 15.7 percent to Sh22 per share or Sh8.3 billion.
KCB Group bucked the trend, cutting its payout for the review period by a third to Sh2 per share, amounting to Sh6.4 billion.
DTB Group also raised its dividend payout by 66 percent to Sh5 per share for the year ended December, joining other listed lenders in making record payments to shareholders.
→ palushula@ke.nationmedia.com
No comments :
Post a Comment