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Equity posts Sh17.5b in Q3 profits

Wednesday, November 13th, 2019 04:29 | By
Equity Group Holdings Plc CEO Dr James Mwangi.

A surge in lending, earnings on interest and non-funded income pushed Equity Group Holdings’ net profits to Sh17.5 billion in the third quarter (Q3) of 2019, a 10 per cent rise from what the bank recorded in a similar period last year.

The group’s profit before tax also increased from Sh22.4 billion in Q3 of 2018 to Sh24.8 billion in Q3 of this year – representing an 11 per cent rise.

According to the results released yesterday net interest income for the nine months came in at Sh32.3 billion, compared with Sh29.5 billion a year ago.

Rate cap

Equity Holdings chief executive James Mwangi said the non-funded income for the period rose to Sh22.6 billion from Sh19.8 billion last year.

Speaking during an investors briefing, Mwangi said if there was anything the group learnt from the interest rate cap, it’s that they must focus more on non-funded income in order to grow their business and give returns to investors.

He said the bank would not raise its interest rates – at least for the next three months until economic and monetary policies are clearly defined.

“Rate caps fully transformed us to rely on other sources of income other than interest,” he said. Mwangi said the bank  recorded a 21 cent growth on its loan book. 

The group’s investment into government securities went from Sh158.6 billion to Sh165.8 billion– which was a five per cent increase as more funds were reallocated to lending to the real economy.

Loans and advances to customers grew by Sh60.5 billion to Sh348.9 billion up from Sh288.4 billion reflecting a growth of 21 per cent with 75 per cent of the loan portfolio held by enterprises. 

The group’s balance sheet grew by 21 per cent to Sh677 billion up from Sh560.4 billion driven mainly by 21 per cent growth in net loans and 40 per cent growth in cash and cash equivalents.

Shareholders’ funds have grown by 20 per cent to Sh108.7 billion up from Sh90.7 billion while long-term funding has grown by 18 per cent to Sh66.3 billion reflecting a stable diversified mix of funding.

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