Equity Group has reported a 30 percent growth in its loan book from sh348.9 billion in September 2019 to sh453.9 billion as of 30th September 2020.
While releasing the results for Q3 2020, Dr. James Mwangi, Group Managing Director and CEO said the increase was in order to support customers who saw opportunities of green shoots and diversification in the COVID-19 environment. “Most of the new opportunities we funded were in manufacturing of PPE’s, logistics, online businesses, agro-processing, fast-moving consumer goods and agriculture value chains.”
Customer deposits registered a 45 percent growth from sh478 billion to sh691 billion driven by 51 percent growth in Uganda, 21 percent growth in Kenya and an additional sh130 billion from the acquisition of BCDC in DRC.
Loans to customers grew by 30 percent driven by 37 percent growth in Uganda, 19 percent growth by Equity Bank Congo, 15 percent growth in Rwanda, 15 percent growth in Kenya and an additional sh48.5 billion from the acquisition of BCDC in DRC.
The growth in capital weighted loan book and capital geared customer deposits was on the back of a 27 percent growth in shareholders’ funds following the withdrawal of Equity Group Holdings’ 2019 dividend payout. The balance sheet of the Group grew by 38 percent from sh677.1 billion to reach sh934 billion.
Regional expansion and business diversification efforts have reduced dependence on Kenya for Group performance making the Group truly a regional financial services provider. Regional subsidiaries now contribute 40 percent of customer deposits, 39 percent of Group total assets, 33 percent of the loan book, 30 percent of the Group’s revenue and 25 percent of the Group’s profit before tax.
The Group increased its capital base by 27 percent to sh137.6 billion from sh108.7 billion to fortify the balance sheet.
The Group’s liquidity position strengthened to 55.7 percent driven by a 61 percent growth in cash and cash equivalents and a 34 percent growth in Government securities.
It increased its loan book provision eleven-fold from sh1.3 billion to sh14.3 billion compared to the same period last year, registering a cost of risk of 4.8 percent up from 0.8 percent the corresponding period last year.
To further consolidate liquidity, the Group increased its long-term funding by 7 percent to sh70.7 billion from sh66.3 billion as shareholders’ funding grew by 27 percent.