Equity Group reports strong regional growth, record profits, and strategic expansions in insurance and sustainability initiatives

Equity Group Holdings Plc (EGH) has shown resilience amidst high-interest rates and fluctuating exchange rates across its markets, reporting steady growth and increased contributions from its regional operations. As of September 30, 2024, regional branches contributed 51% of the Group’s profit before tax and accounted for 48% of its total assets, which now stand at Kshs 1.7 trillion (Shs 48.4 trillion).

EGH, recently recognized as Africa’s top financial brand and the world’s second-strongest banking brand by Brand Finance, saw a 9% year-on-year increase in deposits, reaching Kshs 1.3 trillion (Shs 37 trillion) with a customer base of 21.3 million. This deposit growth strengthened the Group’s liquidity, increasing cash reserves by 12% to Kshs 295.5 billion (Shs 8.4 trillion) and expanding investments in securities to Kshs 468.1 billion (Shs 13.8 trillion), achieving a solid liquidity ratio of 55%.

While announcing third-quarter results, Dr. James Mwangi, EGH’s Managing Director and CEO, expressed optimism for future growth. With central banks in some markets lowering their reference rates, the Group’s improved liquidity enables it to reduce costly long-term debt by Kshs 137.6 billion (Shs 3.9 trillion) and better support customers as economic conditions stabilize.

EGH also saw a 17% increase in shareholders’ equity, totaling Kshs 227.0 billion (Shs 6.5 trillion), which strengthens its capacity to pursue new investments, including recent expansions in the insurance sector. The Group’s interest income grew by 13%, reaching Kshs 125.9 billion (Shs 3.6 trillion), while non-interest income rose by Kshs 2 billion (Shs 57 billion), contributing to an 8% growth in total income.

A focus on regional expansion has boosted performance, with subsidiaries in the Democratic Republic of the Congo (DRC) and Rwanda (including the acquisition of Cogebanque) contributing to a larger share of the Group’s total loans (47%) and profits (47%). EGH has also maintained a prudent risk management strategy, setting aside Kshs 12.7 billion (Shs 342 billion) for loan loss provisions, which has kept its non-performing loan (NPL) ratio at 13.4%, lower than the industry average of 16.7%.

For the nine months ending in September, EGH reported a 13% increase in profit after tax, reaching Kshs 40.9 billion (Shs 1.1 trillion), and an earnings-per-share increase to Kshs 10.4 from Kshs 9.2. Regional subsidiaries contributed 51% of the Group’s profit. The Group’s strong capital and liquidity buffers, with core capital and total capital ratios at 15.9% and 18.3%, respectively, exceed regulatory thresholds.

In addition to banking, EGH has expanded its insurance offerings to promote financial resilience. Equity Life Assurance (Kenya), the Group’s first insurance subsidiary, posted a remarkable 181% year-on-year increase in profit before tax, reaching Kshs 1.07 billion.

EGH is leveraging its expansive branch network and over 1.1 million agents and merchants to distribute insurance products, which complements its “One Equity” digital-first approach. With 86% of transactions conducted through digital channels, the Group is focusing on customer-centric, bundled product offerings accessible across multiple channels.

In social impact, the Equity Group Foundation awarded university scholarships to 113 students from Kenya, Rwanda, Uganda, and DRC and provided technical and vocational training scholarships to nearly 4,000 students. The Foundation’s MSME support initiatives, under the Young Africa Works program, have trained over 596,000 small business owners, with loans totaling Kshs 323.3 billion disbursed to more than 315,000 MSMEs.

Committed to sustainability, EGH recently unveiled its 2023 Sustainability Report, highlighting its contributions to environmental, social, and economic goals. The Group has adopted frameworks such as the Taskforce for Nature-related Financial Disclosures (TNFD) and Africa Natural Capital Alliance (ANCA) to guide its sustainability initiatives. Equity Bank also leads in climate finance, having disbursed over USD 200 million for climate-related projects and planted 30 million trees as part of its environmental restoration efforts.

Related