Equity Group has recorded after tax profit of Sh8.7billion in the first quarter of 2021 compared to Sh5.3billion same period last year, the lender said on Wednesday.
The result is a 64 per cent jump from last year same period performance.
Interest income grew by 32 per cent while non-funded income grew by 30 per cent to contribute 42 per cent of total income. Regional subsidiaries registered resilience and robust growth to contribute 40 per cent of total deposits and total assets and 23 per cent of profit before tax with Rwanda and Uganda delivering above cost of capital returns.
The Group registered a balance sheet expansion of 54 per cent to reach Sh1.07 trillion driven by a 58 per cent growth in customer deposits underpinned by Sh140 billion shareholders’ funds. A liquid balance sheet with Sh500 billion of cash, cash equivalents and government securities reflect the agility to redeploy funding seamlessly as the economies recover from the adverse impact of the Covid-19 multi-crisis.
“Our strategy; purpose-first, inclusivity, affordability, reach, agility and quality have proven resilient and sustainable” said Dr James Mwangi, the Equity Group CEO while releasing the first quarter of 2021 financial results. “Purpose has proved profitable” he added.
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During the multi-crisis year, Equity focused on social impact investment in health investing Sh1.7 billion in social response to society, forgoing Sh1.5 billion in waived mobile transaction fees, waiving Sh1.2 billion in loan rescheduling fees and accommodating Sh171 billon (or 31 per cent) of the loan book for up to 3 years of principal and interest repayment breaks to enable businesses to survive. “We kept the lights of the economies we operate in on, supported businesses to repurpose, retool and recover by supporting livelihoods of our customers during the crisis”, said Dr Mwangi.
He added, “We have adopted a two-pronged strategy of being offensive and defensive. We strengthened our capital buffers by retaining profits and withholding dividend payouts, took long-term loan facilities that strengthened our liquidity buffers, supported host communities and our clients to mitigate the impact of the crisis on them by waiving fees and rescheduling their loans to match loan repayments to new cashflow patterns. Internally, we focused on risk mitigation and management in a challenging environment, enhanced our NPL coverage through provisions and sought collaboration with development financial institutions on credit and risk sharing guarantees. We evolved our organization structure through strong governance focus on risk management, diversity of skills and competencies to enhance our succession planning and mitigation of key person risks”, added Dr Mwangi.
Operationally, the Group focused on generating and growing non-funded income, treasury efficiency, geographical expansion and business diversification, business transformation through innovation and digitization, balance sheet optimization and agility, asset quality and risk mitigation while pursuing efficiencies and brand development through social impact investment underscoring the performance of the Group.
Of the 31 per cent of the loan book, or Sh171 billion Covid-19 accommodated or rescheduled loan book, Sh59 billion has resumed repayment with Sh 5 billion fully repaid and Sh3 billion behind schedule in repayment. Sh66 billion is expected to resume repayment within six months by 30th September 2021.
