By Etaarifa Contributor
Equity Group Holdings has registered a 12 percent pre-tax profit growth in its half year trading results of Ksh. 12.1 Billion up from Ksh. 10.8 Billion posted within the same period last year.
The Group is attributing its sustained growth pace to increased earnings from its banking subsidiaries across East Africa and success in its strategic initiatives geared towards revenue diversification. The Group’s net profit grew similarly by 12 percent to Ksh. 8.6 Billion up from Ksh. 7.7 Billion last year.
Equity Group’s balance sheet maintained its growth streak to close at Ksh. 400.9 Billion this half year up from Ksh. 302.9 Billion booked same time last year; representing a 32 percent growth rate on assets. The balance sheet growth was driven by customer deposits which grew by 40 percent to Ksh. 301 Billion up from Ksh. 214.9 Billion.
The growth in deposits was coupled by a 27 percent rise of the loan book to Ksh. 236.8 Billion from Ksh. 186.5 Billion amidst a stable Non-Performing Loans portfolio currently standing at 4.4 percent.
The Group’s ongoing efforts to diversify its revenue streams also received a boost this half year, with its total income growing 18 percent to close at Ksh. 26.3 Billion up from Ksh. 22.3 Billion registered in the same period last year. Net interest income booked an 11 percent growth while the non-funded income grew at a rate of 30 percent to close at Ksh. 10.8 Billion up from Ksh. 8.3 Billion.
Equity’s strategic growth initiatives continued to fuel its revenue climb as evidenced by rising income from its payment processing and merchant business which grew its commission income by 57 percent. Forex income also grew by 76 percent during the same period, largely aided by growing diaspora remittances and foreign currency denominated funding programs to regional SME’s.
On the other end, total expenses grew by 22 percent to Ksh. 14.2 Billion on the back of costs associated expansion and strategic investments in Information Technology capability, convergence of banking, telecommunications, channels and products in order to fully digitize the Group’s operations.
Speaking, during an investors briefing meeting to officially release the half year results, Equity Group Holdings, Managing Director, Dr. James Mwangi, said the firm’s growth path, remains firmly anchored on its regional business interests, diversification of revenue sources and dedication to foster lasting customer and strategic partnerships.
Through the Equity 3.0 growth strategy, Dr. Mwangi, said the Group is pursuing a clear strategy to become one of Africa’s most respected diversified business groups.
During the half year, Equity grew its agency network across East Africa to 21,100 agents. The growth of the agency model, has led to a steady increase in the transactions at agent premises; effectively overtaking Branch and ATM transactions, translating to lower operating costs for the group.
Dr Mwangi also added that at the close of the half year trading period, Equitel; the Group’s telecommunication services firm, delivered through its Finserve Africa subsidiary, had registered more than 1 million subscribers. Equitel has curved an enviable market niche as the fastest growing Mobile Virtual Network Operator (MVNO) in the region with a 93 percent cumulative monthly growth rate on SIM uptake. The MVNO has also pushed Equity’s monthly mobile banking volumes for the half year to Ksh. 9.3 Billion. Monthly mobile banking loan disbursements, surpassed Ksh. 2.4 Billion with more than 620, 000 individual disbursements.
Equity Investment Bank (EIB) managed to book brokerage business valued at Ksh. 33.6 Billion during the half year period, controlling 16 percent of the stock brokerage business, at the Nairobi Securities Exchange to become the 2nd biggest stock brokerage.