Equity Bank Net Profit Hits Ksh 33.4b In Nine Months

Equity Group recorded an increase in its net profit by 27% to Ksh.33.4 billion in the nine months ending September.

The increase in profitability from Ksh.26.3 billion last year is largely due to higher income during the period, with the Group’s total operating income reaching a new high of Ksh.100.9 billion.

The increase in income is also due to a 31% increase in non-interest funded income (NFI) to Ksh.41.1 billion, which is largely supported by trade finance income.

At the same time, Equity’s interest income has increased by 26% to Ksh.84.2 billion, accompanied by a 21% increase in loan book to Ksh.673.9 billion.

Dr. James Mwangi, Equity Group Managing Director, attributes the bank’s growth to its ability to convert customer deposits into loans, which drives revenue through new lending.

During the quarter, equity deposits surpassed Ksh.1 trillion, totaling Ksh.1.007 trillion.

“The answer is clear. This is a liability-led growth with the customers making the decision to hand us their deposits which we intermediate in the market in the form of loans,” Mwangi said.

“We have gone back to the market and we want to stimulate the market. We see ourselves significantly unpacking cash held in government securities.”

Equity Group’s asset base has increased by 15% in the third quarter to Ksh.1.364 trillion.

The bank’s balance sheet has grown while maintaining operational efficiencies.

Equity finished the quarter with a non-performing ratio of 9%, compared to the industry average of 13.7%, and a cost to income ratio (CIR) of 48.1%.

Dr. James Mwangi believes the bank has laid the groundwork for even greater growth in the medium term.

“It has taken us years to achieve a Ksh.1 trillion asset base. We see ourselves reaching our second trillion in five years,” he added.

Equity Group has not declared an interim dividend for the period, but a lump sum payment to shareholders is expected after the end of the fiscal year in December.