Equity Group has reported a Ksh. 19.79 billion in 2020 full year net profit, representing an 11.6% year-on-year reduction.
In its financial report, Equity was plagued by poor non-performing loans, which surfed by 63.7% to Kshs. 59.39 billion.
“Total operating costs grew by 67% to Kshs 71 billion up from Kshs 42.5 billion driven by a 496% growth in gross loan provision of Kshs 26.6 billion up from Kshs 5.3 billion in the prior year, increasing the cost of risk to 6.1% up from 1.3% the previous year. The higher loan loss provisions enhanced NPL coverage to 89%,” said Equity Group Chief Executive Officer Dr James Mwangi.
Hwever, Kshs 40 billion of the restructured loans had resumed repayments and normalized.
Net interest income grew by 23% to Kshs 55 billion up from Kshs 45 billion driven by a 30% growth on customer loan book and 26% growth in investment in Government securities.
Diaspora remittances which have defied the pandemic to registered stronger growth from key source markets saw Equity earn Kshs. 1.5 billion from commissions which surged 76% from Kshs. 900 million recorded last year.
Forex trading income grew by 77% to stand at Kshs 6.2 billion up from Kshs 3.5 billion.
“Volume of Forex trading increased by 51% to Kshs 863 billion up from Kshs 571 billion with Diaspora remittance contributing 32% of the volume of forex traded.”
Non-funded income grew at 27% to reach Kshs 38 billion up from Kshs 30 billion to contribute 41% of the total income.
Equity Bank resorted to skip any dividend payout opting to devote internally generated funds to the Group’s strategy that has it expand the balance sheet to more than a trillion Kenya shillings.
Equity Group is optimistic that with the development of the COVID-19 vaccine, the health crisis caused by COVID-19 will be brought under control
