Equity Bank Group has reported 15.1 percent increase in profit after tax (PAT) to Kshs 46.1 billion in financial year 2022 from Kshs 40.1 billion recorded the previous year.
The Group’s CEO James Mwangi has attributed the 15.1 percent growth in net earnings to customer-centric products and digital banking.
He further commented that 97 percent of the bank’s transactions are now happening on self-service mobile devices and through third-party payment infrastructure which explains the continued efficiency of operations.
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The performance was mainly driven by 25.0 percent increase in Net Interest Income to Kshs 86.0 billion in financial year 2022, from Kshs 68.8 billion recorded the previous year.
In addition, Non- Interest Income increased by 34.5 percent to Kshs 59.9 billion from Kshs 44.6 billion during the reference period, mainly driven by trade finance, payment channels and foreign exchange trading income.
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Equity Group’s directors recommended a total dividend per share of Kshs 4.0, 33.3 percent increase from Kshs 3.0 issued in 2021.
The leader’s performance was however weighed down by a 40.0 percent increase in operating expenses to Kshs 86.1 billion from Kshs 61.5 bllion during the reference period. This increase is attributable to increased provisioning for loan defaults and spending more on paying staff.
“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.
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Additionally, the Group adopted a cautious stance in financial year 2022, reflected by the 163.7 percent increase in Loan Loss Provisions to Kshs 15.4 billion from Kshs 5.8 billion recorded in 2021.
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 Kshs 40.8 billion.
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