Equity Group half-year Earnings Hit Sh26.3B

In the six months that ended in June, Equity Group’s net profit jumped 7.8% to Sh26.3 billion owing to increased interest and non-interest earnings.

Due to increased lending, net interest revenue increased by 16.6% to Sh46.4 billion, while non-interest income rose by 42.9% to Sh36.5 billion.

According to Equity Group CEO James Mwangi, the lender increased its loan book by 25.6 percent to Sh817.19 billion on Tuesday despite rising loan default rates as consumers and businesses struggle with the economy.

“We want to support businesses, communities, and entrepreneurs to wade through these difficult and challenging times. You don’t avoid risk. You manage risk,” said Mr Mwangi.

The increase in the base lending rate as the Central Bank of Kenya sought to control high inflation was partially responsible for the increase in interest income.

“When the government increases interest rates or issues three-year bonds at 16 percent or 17 percent, it means that we can’t undermine the sovereign risk rate by issuing interest rates lower than that,” said Mr Mwangi.

The group also benefited from currency exchange, which saw a rise in revenue from Sh5.03 billion to Sh8.45 billion during the time when many companies were seeking dollars to facilitate imports.

“As the country goes through the challenges of forex, the group has been supported heavily by diaspora flows that have enabled us to keep the lights of businesses of our customers on, providing them foreign currency as they required and we can see the growth in forex trading income as a result,” said Mr Mwangi.

According to Mr. Mwangi, funding increased faster than loans, creating space to invest in government securities and increasing revenue from this line of business from Sh19.1 billion to Sh22.7 billion.