Equity Group has announced a 36% increase in its after-tax profit of Ksh 24.4 billion for the six months ending June 30, 2022.
Profit growth in the first six months of the year exceeded the Ksh 17.9 billion the lender recorded in the same period last year.
Equity Group Managing Director, Dr. James Mwangi, attributes the profit growth to interest income which jumped 29% from Ksh 42.8 billion to Ksh 55 billion, due to the increase loan subscription by customers.
The bank loan portfolio during the period increased by 29% to Ksh 650.6 billion from Ksh 504.8 billion.
“Loan growth was intended to help our clients recover and rebuild from the business disruptions of Covid-19 while enabling refocusing and retooling for resilience and agility to take advantage of emerging opportunities and growth. in the real economy,” said Dr Mwangi. .
The lender also reported improvements in loan repayments, particularly from customers, as business continues to recover from the effects of COVID-19.
Equity reports that out of a portfolio of restructured Covid-19 loans of Ksh 171.4 billion, Ksh 46.6 billion has been fully repaid and a further Ksh 114 billion has resumed repayment.
The group also reduced its non-performing loans to 8.5% from 10.7% of the loan portfolio equivalent to Kshs 8.1 billion.
The lender further indicates that of the remaining Ksh 11 billion expected to resume repayment in the next six months, only Ksh 2.7 billion is showing recovery tension.
Dr Mwangi says the bank continues to diversify its loan portfolio to hedge against any potential defaults.
In June, small and medium-sized enterprises (SMEs) held the largest share of the group’s total loan portfolio, accounting for 43% of loans, followed by large businesses at 26% and consumers at 20%.
The agricultural sector represents 8% of loans and micro-enterprises 3%.
45.9% of the loan portfolio is in US dollars and 54.1% in local currencies, Equity said.
“Geographic diversification of sovereign risk results in Kenya holding 65%, DRC 19.6%, Uganda 7.3%, Rwanda 4.4%, Tanzania 3.6% and South Sudan 0.1%,” he said.
The group saw 19% growth in total assets to Ksh 1.3 trillion from Ksh 1.1 trillion, mainly driven by a 59% growth in long-term debt funding to Ksh 162.6 billion and 18% growth in customer deposits to Ksh 970.9 billion from Ksh 820.3 billion as the number of customers increased. 18pc at 16.9m vs. 14.3m.