Equity Group Holdings Half Year Results

Equity Group Holdings Company Limited announced results for the half year ended June 2015 with the following highlights:

• Net interest income grew by 10.6 percent from KES 14.01bn in 2014 to KES 15.50bn in 2015 while interest expense grew by 27.3 percent to KES 3.76bn in 2015.

• Non-interest income grew by 29.9 percent from KES 8.32bn to KES 10.81bn in 2015 following growth in fees and commissions income, other income and foreign exchange income (by 12.7 percent, 141.48 percent and 75.92 percent respectively.

• Operating income increased by 17.8 percent to KES 26.31bn in 2015 in tandem with rising interest and non-interest income.

• Total operating expenses grew by 22.4 percent from KES 11.62bn in 2014 to KES 14.22bn in 2015 following investments in ICT infrastructure.

• The cost income ratio stood at 54.0 percent in 2015 from 52.0 percent in 2014.

• Loan loss provisions increased by 32.2 percent from KES 517.97mn in 2014 to KES 684.90mn in 2015.

• Pre-tax income went up by 12.9 percent to KES 12.10bn in 2015 as profit after tax recorded a 11.8 percent improvement from KES 7.66bn in 2014 to 8.57bn in 2015. This translated to an EPS of KES 2.31.

• The Balance sheet grew by 32.4 percent for the period ended 30 June 2015, as a result of a 39.7 percent growth in customer deposits from KES 214.53bn in 2014 to KES 299.70bn in 2015.

• Loans and advances to customers grew by 27.0 percent from KES 186.51bn in 2014 to KES 236.82bn in 2015 following growth in the loan book mainly from the SME segment.

• Total shareholders’ funds grew by 21.9 percent from KES 53.31bn in 2014 to KES 65.00bn in 2015.

Our view

Equity bank’s entry into telecommunications’ sector will spur further growth and diversification of the bank’s revenues. The bank launched its telco unit, Equitel in July 2015.

We expect steady growth in Interest income driven by increased lending within the SME sector which has seen increased demand for credit. The recent partnership with multilateral lenders will drive the bank’s lending ability.

The bank’s venture into DR Congo will further strengthen its regional footprint.