(Nairobi) – Equity Group has reported a 13.1% increase in its net profit for the third quarter, reaching KSh 40.9 billion. This growth was primarily supported by increased income from its subsidiaries in Tanzania and Rwanda.
Equity Group’s net interest income rose by 11% to KSh 80.6 billion, fueled by higher yields on investment securities. Additionally, non-funded income grew by 5.8% to KSh 61.2 billion, largely due to increases in fees and commissions. However, operating expenses also rose by 7.4%, climbing from KSh 84.5 billion in 2023 to KSh 90.7 billion this year, which partially offset the profit gains.
| Financial Metric | Q3 2024 | Year-over-Year Growth |
|---|---|---|
| Net Profit | KSh 40.9 billion | 13.1% |
| Net Interest Income | KSh 80.6 billion | 11% |
| Non-Funded Income | KSh 61.2 billion | 5.8% |
| Operating Expenses | KSh 90.7 billion | 7.4% |
| Customer Deposits | KSh 1.3 trillion | 9% |
Customer deposits grew by 9%, totaling KSh 1.3 trillion. Rwanda, the Democratic Republic of Congo (DRC), and Kenya led this growth, with deposits increasing by 39%, 14%, and 8% in these regions, respectively. On the other hand, customer loans declined by 5.4% to KSh 800.1 billion, largely due to a reduction in loan books in Uganda and Tanzania. Gross non-performing loans rose by 0.7% to KSh 125.3 billion, with the ratio of non-performing loans increasing slightly to 13.4%, which remains lower than the industry average of 16.7%.
Equity Group increased its investments in government securities by 5.4%, totaling KSh 468.1 billion, while decreasing its loan loss provisions by 33.2% to KSh 12.7 billion, reflecting cautious optimism about the quality of its credit portfolio going forward.
Equity Group’s regional subsidiaries played a key role in its third-quarter performance, contributing 47% of total profit after tax with KSh 18.4 billion. These subsidiaries accounted for 53% of total group revenue and 54% of pre-provision operating profits. “Our subsidiaries outside Kenya now contribute 51% of our total profit before tax, with 48% of our balance sheet also based outside the country. EquityBCDC in DRC is playing a key role in driving this growth,” said Dr. James Mwangi, Equity Group Managing Director and CEO.
However, pre-provision operating expenses rose by 52%, largely due to cost pressures in the South Sudan subsidiary, which saw a substantial 586% increase in pre-provision expenses.
The Group’s total assets increased to KSh 1.7 trillion in the third quarter, representing a 0.7% rise from the same period last year. Equity Group Holdings reported an earnings per share (EPS) of KSh 10.41 for Q3, a 13.5% increase from 2023. Despite the strong performance, the company did not declare an interim dividend.
Equity Group’s stock is listed on the Nairobi Securities Exchange and is the largest lender by market capitalization. Its stock closed on Monday at KSh 48.10, reflecting a 42.9% year-to-date gain.