Equity first-quarter profit grows 6.6pc to Sh12.3bn

Equity Group headquarters in Upper Hill, Nairobi. PHOTO | NMG    

By KEPHA MUIRURI More by this Author

Equity Group’s net profit rose by 6.6 percent in the first three months to March driven by strong growth in non-funded income.

The bank has reported net earnings of Sh12.3 billion in the review period, up from Sh11.5 billion a year earlier.

“Non-funded income continues to grow much faster than interest income, and this is the momentum we want to maintain,” Equity Group CEO said James Mwangi on Tuesday.  

The non-funded income, mainly derived from fees and commission, grew by 54 percent to Sh18.4 billion.

The lender said trade finance-related lending and guarantees were the leading sources of non-funded income.

Net interest income rose by 12 percent to Sh21.7 billion from Sh19.4 billion to Sh21.7 billion.

Investment in government debt securities increased by one percent to Sh392.5 billion from Sh389.4 billion.

During the review period, the group's loan book expanded by 21 percent to Sh756.3 billion as customer deposits rose by 23 percent to Sh1.111 billion.

Its cash and cash equivalents jumped 55 percent to Sh258.4 billion from Sh166.4 billion.

The lender’s costs went up by 46 percent to Sh22.8 billion from Sh15.6 billion largely on higher staff costs and innovation and technological investments.

Equity has also raised its cover for dud loans by 127 percent to Sh3.1 billion from Sh1.4 billion on what the bank states as a deteriorating operating environment.

In the three months cycle, the bank's non-performing loans ratio, for instance, rose to 9.1 percent from 8.65 percent in March 2022.

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