Equity Group, a Nairobi-based financial services conglomerate led by Kenyan multimillionaire banker James Mwangi, delivered a resilient financial performance during the nine-month period of its 2023 fiscal year, with profits exceeding the $230-million mark.
The group’s recently published unaudited financial statements for the period ending Sept. 30 revealed a 5.3 percent year-on-year increase in profit, rising from Ksh34.37 billion ($225.4 million) in 9M 2022 to Ksh36.2 billion ($237.4 million) in 9M 2023.
East African expansion ignites double-digit profit surge for Equity Group, offsetting Kenyan unit dip
The modest increase in profit was driven by double-digit growth from subsidiaries in the East African region, including operations in Democratic Republic of Congo, Uganda, Rwanda, and Tanzania. These subsidiaries propelled profits above the $230-million mark — offsetting the 20-percent dip in earnings from its Kenyan unit.
In 2022, the subsidiaries — excluding its operation in South Sudan — contributed Ksh11 billion ($72.11 million) or 31 percent of the group’s profits after tax. This figure has now surged to Ksh18.5 billion ($121.2 million) or 53.5 percent of earnings during the nine-month period under review.
Under the leadership of Mwangi, the managing director and CEO who owns 3.38 percent of the group, Equity Group has solidified its position as a dominant force in East and Central Africa.
Mwangi’s strategic vision expanded the lender’s operations into multiple countries, including Uganda, Tanzania, South Sudan, Rwanda, and the DRC — at the time of drafting this report, the group boasts a $940 million market capitalization and ranks as the second most valuable company in Kenya.
James Mwangi highlights group’s growth amidst challenges in Kenya
Commenting on the recently released unaudited financial statements, Mwangi highlighted the impact of elevated inflation, the weakening of the Kenyan shilling against the dollar, and rising interest rates on customers. In response, the lender chose to absorb part of the hit through the profit and loss account.
“We chose to use the P&L to mitigate the full impact of inflation, depreciation, and high interest by ensuring we didn’t pass the full impact to the customer. The interest expense is, for instance, growing much faster than the interest income, deliberately to accommodate the customer for at least one year,” said Mwangi.
Speaking about the financial performance of the group’s operations outside Kenya, Mwangi expressed optimism, stating, “If we thought the group was getting to maturity because Kenya is now close to maturity, the entire group has become a startup all over again because of the momentum in DRC, Uganda, Rwanda, and the newfound energy that Tanzania is bringing to the table.”