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USh1.2 trillion: Record performance for Equity Group

Equity Group Managing Director and CEO Dr. James Mwangi (centre), Equity Group Director IT and Operations Lanre Bamisebi (left) and Equity Group Director Enterprise Risk Sam Gitwekere (right) engage during the 2021 Full Year Financial Results. Profit After Tax increased by 99%

Profit After Tax increased by 99% to Ushs 1.2 trillion ($349million)

Nairobi, Kenya | THE INDEPENDENT | Equity Group has recorded superior performance for the year ended 31st December 2021, putting it at the top as the regional financial sector market leader, despite the challenging operating environment characterized by a global COVID-19 pandemic.

Profit After Tax increased by 99% to Kshs 40.1 billion ($349.7 million – Ush1.2 trillion) from Kshs 20.1 billion ($175 million – Ush631 billion).

The Group has recommended a record dividend payout of Kshs 3 per share totalling Kshs 11.3 billion (Ush335 billion) which is a 50% jump from previous dividend pay-out after earnings per share grew by 98% to Kshs 10.40 up from Kshs 5.20 the previous year. (1 Kenya shilling = 31.44 Ugandan shillings)

A look at Equity’s balance sheet, asset size, profitability, customer base and market capitalisation at the Nairobi Securities Exchange shows that the group has emerged as the regional financial sector market leader despite 2 years of operating in a COVID-19 environment.

“Equity has emerged stronger, transformed, and registered record financial performance and has strengthened its social contract with society, remaining focused on its purpose while learning valuable lessons,” Equity Group MD and CEO Dr. James Mwangi noted as he released the latest figures.

Equity’s Profit Before Tax recorded a growth of 134% to Kshs 51.9 billion up from Kshs 22.2 billion the previous year.

In support of the economy during the COVID-19 crisis, the Group waived mobile banking transaction fees amounting to Kshs 2.9 billion and Kshs 1.2 billion of loan rescheduling fees to enhance disposable income of clients while easing the cost of living pressure to low-income households.

The Group rescheduled loans amounting to 32% of all client loans to support businesses to survive, and households to realign to new and emerging opportunities.

The shareholders paid the price for two consecutive years foregoing dividends to backstop the risk of uncertainty and enable the Group to enhance its capital buffers. International financial and development partners worked with Equity to strengthen its capital buffers through USD 265 million of Tier 2 capital, and partial credit guarantees in a credit risk-sharing mechanism for sectors adversely affected by COVID – 19.

“This fortified our capital buffers and increased our ability to support our customers, enhanced liquidity buffers to 64% while mitigating cashflow risk during the uncertain times,” said Dr. Mwangi while releasing the results.

The bulk of customers’ engagement and consumption of banking products and services is now on digital channels of internet and mobile on self-service devices delivering a 24-hour banking experience and convenience. Banking has largely shifted from where you go to what you on do on your devices compressing geography and distance.

Response to COVID-19

“When COVID- 19 struck, Equity Group sought its true north, its purpose and commitment to support its members. The Board and Management decided to focus on saving lives and livelihoods, giving dignity, and expanding opportunities for wealth creation while keeping the lights of the economies on,” Equity said in a statement.

Against a backdrop of uncertainty, the Group focused on supporting customers and in the process increased and accelerated loan disbursements and growth by over 29% and 23% for the two years respectively while the economy was plummeting to a GDP growth rate of negative 0.1% from a high of 5.8%.

Equity was committed to save the businesses of its customers while maintaining livelihoods. As the COVID-19 pandemic mutated into a social, humanitarian, and economic crisis, Equity Group rolled out social investments of Kshs 5.8 billion to complement Government’s health and social responses in the East and Central Africa region. Equity Group MD and CEO Dr. Mwangi served on the Kenya National Emergency Response Fund for COVID-19 Board as Chairman of the Health Committee.

Equity Group Chairman Professor Isaac Macharia served as the Chairman of the Board’s Health Technical Advisory Committee while Dr. Joanne Korir, Equity Group Foundation’s Head of Health, served as the Committee Secretary.

The Group leveraged on its Equity Afia clinic network to spearhead a COVID- 19 health awareness campaign for staff and customers, keeping the doors of its 51 clinics open and cumulatively recording over 701,000 patient visits. The Group, jointly with Mastercard Foundation and Dr.  Mwangi’s family contributed Kshs 1.7 billion of which Kshs 1.3 billion went into the COVID-19 health response focused on building capacity, including repurposing and funding local manufacturers to establish PPE manufacturing facilities, and supporting 116 National Referral, County and faith-based hospitals with free PPEs and comprehensive supplies in Kenya. This was accomplished over the last 2 years in collaboration with the Kenya COVID-19 Emergency Response Fund Board.

Results summary

  • 29% growth in Balance Sheet to Kshs 1.305 trillion from Kshs 1.015 trillion
  • 29% growth in customer deposits to Kshs 959 billion from Kshs 740.8 billion
  • Emerges the largest bank in Kenya and in the region by all key parameters: balance sheet, profitability, market capitalisation and customer base
  • Improvement in NPLs from 11% to 8.3% and increase of provision coverage from 89% to 98%
  • 99% growth in Profit After Tax to Kshs 40.1 billion from Kshs 20.1 billion
  • 98% growth in earnings per share to Kshs 10.40 from Kshs 5.20
  • Record dividend pay-out of Kshs 11.3 billion, a 50% increase from last dividend pay-out for 2018

CLICK TO READ FULL RESULTS – IT’S A RECORD PERFORMANCE FOR EQUITY GROUP

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