Equity Group Half Year Profit before Tax grows by 12%

Equity Group Half Year Profit before Tax grows by 12%

‘as the Group’s Equity 3.0 strategy gains momentum driven by regional expansion, revenue growth and diversification’

• Balance sheet grows by 32% to over KShs 400 billion
• Total Deposits grows by 40% to Kshs 301 billion
• Loans increases by 27% to Kshs  236.8 billion

• Equitel  registers over 1 million subscribers with cumulative monthly growth rate of 93% SIM uptake
• Strategic Initiatives post impressive results
  • 27% increase in Diaspora remittances  commissions
  • 57% increase in Merchant  commissions
  • 30.5% increase in Mobile Banking transactions
  • 38.5% increase in Agent transactions
  • SME’s and large enterprises now account for 68.4% of the loan book
  • 64% increase in regional subsidiary assets
  • 41% increase in profit of regional subsidiaries

Nairobi, Kenya, August 4th 2015… Equity Group Holdings, has registered a 12% pretax profit growth in its half year trading results released today of Kshs 12.1billion up from Kshs 10.8billion posted within the same period last year.

The growth is posted as the Group’s Equity 3.0 strategy gains momentum driven by regional expansion, revenue growth and diversification.

Equity Group Kenya’s largest non-operating holding company (NOHC) by market value and with over 10 million customers attributed its sustained growth pace to increased earnings from its banking subsidiaries across East Africa and success in its strategic initiatives geared to revenue diversification. The Group’s net profit grew similarly by 12% to Kshs 8.6billion up from Kshs 7.7billion last year.

The Group’s balance sheet, maintained its growth streak to close at Kshs 400.9 billion this half year up from Kshs 302.9billion booked same time last year representing a 32% growth rate on assets. Equity Group’s balance sheet growth was driven by customer deposits which grew by 40% to Kshs 301 billion up from Kshs 214.9 billion. The growth in deposits was coupled by the steady rise of the loan book representing a 27% growth to Kshs 236.8 billion from Kshs 186.5 billion amidst a stable NPL portfolio currently standing at 4.4%.

The Group’s, ongoing efforts to diversify its revenue streams also received a boost this half year, with its total income growing 18% to close at Kshs 26.3 billion up from Kshs 22.3 billion registered in the same period last year. The Group’s net interest income booked an 11% growth while the non-funded income grew at a rate of 30% to close at Kshs 10.8billion up from Kshs 8.3billion posted during the same period last year.

The Group’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% while forex income grew by 76% during the same period largely aided by growing diaspora remittances and foreign currency denominated funding programmes to regional SME’s.

On the other end, total expenses grew by 22% to Kshs. 14.2 billion on the back of costs associated with the strategic investments recently made to enhance the Group’s enterprise resource planning capacity in 2014 and geared at creating a robust Information technology capability, convergence of banking, telecommunications, channels and products backed by a commitment to fully digitize the Group’s operations. This has resulted to high system availability, stability and reliability. The above initiatives have led to a growth in investment in ICT of 57% with resultant growth in ICT expenses of 89%.

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.

The Group’s highly successful agency banking model in Kenya, Rwanda and Tanzania continued to enjoy tremendous growth as the number of Equity Agents maintained a growth tangent to close at the 21,100 mark this half year. The growth of the agency model, has led to a steady increase in the transactions at agent premises; effectively overtaking Branch and ATM transactions which translates to lower operating costs. Within the Group’s banking subsidiaries, Equity Agents transactions account for more than 42% of the total transactions processed. Notably, agency deposits are enjoying faster growth than withdrawals.

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 1.0 million subscribers. Equitel, has curved an enviable market niche as the fastest growing MVNO in the region with a 93%, cumulative monthly growth rate on SIM uptake. The Group’s monthly mobile banking volumes for the half year reached Kshs 9.3billion to further confirm the viability of Equity Group’s strategic focus to expand banking penetration through the mobile phone delivery channel. Monthly mobile banking loan disbursements, surpassed Kshs 2.4 billion with more than 620, 000 individual disbursements.

Equity Investment Bank (EIB) recorded exemplary performance managing to book brokerage business valued at KShs 33.6billion. EIB now controls 16% of the stock brokerage business, at the Nairobi Bourse becoming the 2^nd biggest stock brokerage. EIB has partnered with global investment services firm, Exotix Partners LLP. EIB has also developed a steady pipeline on the Corporate Finance and Advisory Services.

The Group’s banking subsidiaries, continues to enjoy market leadership by customer base position with over ten million customers spread across the region.

Due to its unique business model that has focused on nurturing micro enterprises and helping them to transition to the small, medium and large enterprises, the Group has managed to attract funding commitment amounting to US$525million.  The funds are earmarked for onward lending to entrepreneurs including Youth and Women enterprises, Impact entrepreneurs pursuing green energy solutions, Agro-Processing, Retail and Wholesale, Manufacturing among others.

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