Equity Group Holdings, Kenya’s largest bank, reported a notable 4.0 percent increase in pre-tax profits for the third quarter, rising from KES 44.3 billion in 2022 to an impressive KES 45.9 billion.
In Q3 2023, key financial metrics demonstrated robust growth. Loans and advances saw a substantial 25.5 percent increase to KES 845.9 billion from KES 673.9 billion in 2022. Customer deposits surged by 19.9 percent to KES 1.2 trillion compared to KES 1.0 trillion the previous year. Total operating income reached KES 130.41 billion, marking the highest since Q3 2014.
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CEO Dr. James Mwangi attributed this success to Equity Group’s commitment to its customers, even amid challenging economic climates. Dr. Mwangi highlighted the Group’s stellar performance across various markets, citing remarkable profits before tax in subsidiaries like Equity Banque Commerciale Du Congo (BCDC) at 157.0 percent, Tanzania at 82.0, Rwanda at 46.0, Uganda at 27.0, and South Sudan at 9.0 percent.
“We have seen the impact of regional expansion. Our decision to invest in the region was informed by a long-term view,” said Dr. Mwangi, Equity Group MD & CEO in a speech
He further added “The momentum of a 30-year growth of the Kenyan subsidiary is now being replicated by the subsidiaries.”
However, the journey to these heights faced obstacles, with concerns about gross non-performing loans doubling to KES 124.5 billion in Q3 2023 from KES 67.9 billion in Q3 2022. Dr. Mwangi also noted the impact of macroeconomic shocks, particularly the pandemic’s effects on the economy, leading to a slight reduction in transactions via the Equity Mobile App. Nevertheless, he emphasized that 98.0 percent of transactions occurred outside the branch, indicating a customer-centric focus and convenience delivery.
Equity Group’s successful replication model across markets positions it within the top three in most of its operating markets. Dr. Mwangi expressed optimism about the Group’s trade finance solutions becoming the preferred product as trade missions to various countries, including the DRC, USA, and Tanzania, take shape.
Addressing customer de-risking and empowerment, Dr. Mwangi highlighted Equity’s commitment to initiatives like Young Africa Works, focusing on capacitating young people through extensive training programs. Additionally, he noted a significant shift towards digital channels, with 82.0 percent of transactions now occurring digitally.
Despite challenges such as increased funding costs and a fluctuating economic landscape, Dr. Mwangi reassured the public of Equity’s efforts to cushion customers from the impact of interest rates, inflation, and currency depreciation, leveraging the firm’s Profit and Loss statement.
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The strategic expansion into the Democratic Republic of Congo (DRC) positions Equity for further success, with Dr. Mwangi confidently stating that the DRC Equity Bank business will soon surpass Kenya in return on assets.
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