Earnings Snapshot Of Equity Bank’s 2024 Full-Year Financial Results

Equity Group released its FY24 results, reporting a 10.9 percent y-o-y increase in after-tax profits attributable to ordinary shareholders to 46.5 billion shillings.

The Group’s performance was largely steered by a 43.3 percent y-o-y decline in loan loss provision to 20.2 billion shillings. EPS for the period stood at 12.34 shillings (FY23: 11.12 shillings).

The Board announced a first and final dividend of 4.25 shillings per share (FY23: 4.00 shillings). If approved, the dividend will be paid on or before 30th June 2025 to shareholders registered on the Group’s register at the close of business on 23rd May 2025.

Net interest income increased by 3.7 percent y-o-y to 108.7 billion shillings, driven by a 9.2 percent y-o-y growth in total interest income to 170.3 billion shillings against a 20.3 percent y-o-y climb in total interest expenses to 61.6 billion shillings.

Non-funded income grew by 10.7 percent y-o-y to 85.1 billion shillings, mainly bolstered by a 63.2 percent y-o-y jump in other operating income to 17.1 billion shillings and a 12.9 percent y-o-y increase in fees and commission income to 55.4 billion shillings.

Foreign exchange trading income declined by 27.5 percent y-o-y to 12.6 billion shillings. The contribution of non-funded income to total income increased by 99 bps y-o-y to 43.9 percent (FY23: 42.9 percent).

Operating expenses (excluding provisions) registered a 19.8 percent y-o-y increase to KES 112.9 BN, mainly on the back of a 30.5 percent y-o-y increase in other expenses to 70.7 billion shillings and a 3.9% y-o-y increase in staff costs to 33.3 billion shillings. The Group’s cost-to-income ratio (excluding provisions) increased by 599 bps y-o-y to 58.2 percent (FY23: 52.3 percent).

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Loan loss provisions eased by 43.3 percent y-o-y to 20.2 billion shillings as gross non-performing loans for the Group advanced by 6.5 percent y-o-y to 122.0 billion shillings, leading to the NPL ratio to rise by 152 bps y-o-y to 13.0 percent.

The loan book shrunk by 7.7 percent y-o-y to 819.2 billion shillings (+2.4 percent q-o-q), while government and investment securities increased by 2.3 percent y-o-y to 512.0 billion shillings (+9.4 percent q-o-q).

On the funding side, customer deposits grew by 3.1 percent y-o-y to 1.4 trillion shillings (+6.3 percent q-o-q), while borrowed funds declined by 44.4 percent y-o-y to 70.5 billion shillings (-6.1 percent q-o-q).

Equity Group is currently trading at a P/E multiple of 3.8x commensurate with the industry median of 3.8x and a P/B multiple of 0.7x against an industry median of 0.7x.

Its ROE stands at 19.9 percent while its ROA stands at 2.6 percent. As per current prices, its dividend yield stands at 9.2 percent.

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