Equity Group Holdings has recorded a 25% growth in profit to a record Ksh16 billion after tax for first quarter of 2024.
In a statement dated May 13, the Bank said the profit after tax grew after the Group reported a 5% decline for the year ended 31st December 2023.
While releasing the results Dr James Mwangi, Equity Group Managing Director and CEO said the tax before tax also grew during the same period.
“We have been able to turn the tide from declining profit before tax 13% in December we are now at 21% and profit after from a decline of 5% we are up to 25% being able to give a reasonable return on assets,” Dr Mwangi said.
“Ksh16 billion for a quarter profit after tax is the highest profit we have ever registered in a quarter. So, it is a record quarter profit.”
The Bank explained that its differentiated strong leadership decision making, and an agile balance sheet drove the swift recovery.
Deposits placements grew to 11% compared to 29% registered for the year ended 31st December 2023, as the Group skipped expensive deposits.
Additionally, growth in long-term borrowed funds saw a decline of 21% year on year for the period ended 31st March 2024 as the Group paid out maturing repriced expensive dollar denominated loans.
Given the elevated credit risk characterized by high non-performing loans environment (NPL), the Group enhanced credit risk underwriting resulting to a 3% year on year growth in loan book as at 31st March 2024 compared to a 26% growth rate for the year ended 31st December 2023.
This also led to re-allocation of lending from private sector credit to public sector lending through government securities, which grew to 21%.
Consequently, the cost of credit risk dropped to 2.9% for the first quarter of 2024 compared to 4.4% for the last quarter of 2023.
The loan to deposit ratio stood at 63% as of 31st March 2024 compared to 65.3% as at 31st December 2023.
There was slow customer deposits growth and decline in long-term loans yielding a lower year on year growth of interest expense for the reporting period to 31st March 2024 to 41% compared to 53% for the year ended 31st December 2023.
