Equity Group reported a net profit of Ksh. 24.4 billion for the first half of 2022, a 36% increase from Ksh. 17.9 billion in the same period last year.
Profit growth during the first six months of the year was greater than the Ksh 17.9 billion recorded by the lender during the same period last year.
Equity Group Chief Executive Officer Dr James Mwangi attributes the profit increase to increased loan uptake, which increased interest income by 29 percent from Ksh 42.8 billion to Ksh 55 billion.
During the period, the bank loan book increased by 29% to Ksh 650.6 billion, up from Ksh 504.8 billion.
“The loan growth was targeted to supporting our clients to recover and rebuild after the Covid-19 business disruptions while allowing re-purposing and retooling for resilience and agility to take advantage of emerging opportunities and green shoots in the real economy, “said Dr Mwangi.
The lender has also reported an increase in loan repayments, particularly from customers, as businesses recover from the effects of COVID-19.
Equity reports that of the Ksh 171.4 billion Covid-19 restructured loan book, Ksh 46.6 billion has been fully repaid, with a further Ksh 114 billion on the way.
Similarly, the group has reduced non-performing loans to 8.5 percent of loan book, down from 10.7 percent, for a total of Ksh 8.1 billion.
According to the lender, only Ksh 2.7 billion of the remaining Ksh 11 billion, which is expected to resume repayment within the next six months, is under strain of recovery.
Dr. Mwangi claims that the bank is continuing to diversify its loan portfolio in order to hedge against potential defaults.
As of June, Small and Medium Enterprises (SMEs) accounted for 43 percent of the group’s total loan book, followed by large enterprises (26 percent) and consumers (20 percent).
Agriculture accounts for 8% of loans, while micro enterprises account for 3%.
According to Equity, 45.9 percent of loan book is in US dollars and 54.1 percent is in local currencies.
Geographical sovereign risk diversification has Kenya holding 65pc, DRC 19.6pc, Uganda 7.3pc, Rwanda 4.4pc, Tanzania 3.6pc and South Sudan 0.1pc,” he said.
The Group registered a 19pc growth in total assets to Ksh 1.3 trillion from Kshs 1.1 trillion primarily driven by 59pc growth in long term debt funding to Ksh 162.6 billion and 18pc growth in customer deposits to Ksh 970.9 billion up from Ksh 820.3 billion as customer numbers grew 18pc to 16.9 million up from 14.3 million.
