Equity's Q1 Net Profits Up By 36 Percent

Equity’s Q1 Net Profits Up By 36 Percent

By Soko Directory Team / Published May 12, 2022 | 5:48 pm

KEY POINTS

Operating income grew by 21 percent to 30.9 billion shillings up from 25.5 billion shillings with non-funded income constituting 37.2 percent of the operating income.

KEY TAKEAWAYS

Net loans grew 28 percent to 623.6 billion shillings up from 487.7 billion shillings while investments in Government securities grew by 50 percent to 389.4 billion shillings up from 258.9 billion shillings. This saw interest-earning assets grow by 35.7 percent.

The Q1 net profit after tax for Equity Group grew by 36 percent to 11.9 billion shillings up from 8.7 billion shillings the previous year.

Return on Average assets improved to 3.7 percent up from 3.3 percent with return on average equity growing to 27.4 percent up from 25.1 percent. Earnings per share grew by 34 percent to 3.10 shillings up from 2.30 shillings.

“The first quarter of 2022 is a demonstration of the strategy Equity is executing which is developmental. We want to use the Group to transform East and Central Africa and eventually the rest of Africa,” said Dr. James Mwangi.

Group’s total assets and balance sheet grew by 19 percent from 1,066.4 billion shillings to 1,269.5 billion shillings compared to the corresponding period in the previous year while cash and cash equivalents declined by 31 percent from 241 billion shillings down to 166.4 billion shillings as the Group resumed aggressive lending.

Asset reallocation from cash and cash equivalents to interest-earning assets resulted in net interest income growth of 31 percent to 19.4 billion shillings up from 14.8 billion shillings with a yield on earning assets growing to 9.5 percent up from 8.9 percent.

Operating income grew by 21 percent to 30.9 billion shillings up from 25.5 billion shillings with non-funded income constituting 37.2 percent of the operating income.

Regional subsidiaries continued to gain market share with their total revenue contribution to the Group growing to 40 percent (12.8 billion shillings) up from 37 percent (9.6 billion shillings).

The subsidiaries increased their profit after-tax contribution to 30% (3.6 billion shillings) of the Group’s profit after tax up from 21 percent (1.9 billion shillings).

Return on Average Equity for subsidiaries stood at 23.6 percent against a cost of the capital ratio of 21 percent with both Equity Bank Uganda and Equity Bank Rwanda joining Equity Bank Kenya to register return on average assets of above 4 percent despite the asset reallocation liquidity marginally declined to 56.9 percent down from 60.6 percent which reflects on the size of headroom and opportunity for continued optimization of assets allocation and loan growth.

Strategic pursuit of quality growth saw non-performing loans decline to 8.6 percent down from 11.3 percent with the cost of risk normalizing at 1.2 percent and non-performing loan coverage rising to 95 percent up from 87.4 percent.

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