Kenya’s largest financial services group Equity Group Holdings has posted Ksh26.9 billion in profit in the first nine months of 2021, as efficiency in its operations coupled with improvements in its core business boosted earnings above the Ksh25-billion ($223.82 million) mark.
Research by Billionaires.Africa revealed that the group’s earnings in the first nine months of 2021 eclipsed the Ksh20.1 billion ($179.9 million) in profit that it made in 2020 by a total of Ksh6.77 billion ($60.61 million).
Compared to the profit of Ksh15.04 billion ($134.64 million) that the company reported in the first nine months of 2020, profit for same period in 2021 jumped by 79 percent thanks to an offensive growth strategy that led to 23-percent growth in net loans and advances and 62-percent growth in investments in government securities.
Equity Group Holdings Limited is Kenya’s leading financial services holding. The group also ranks among the largest financial services groups in East Africa.
In addition to its operations in Kenya, the holding operates through subsidiaries in Uganda, Tanzania, South Sudan, Rwanda and Democratic Republic of Congo under the leadership of James Mwangi, who serves as the group CEO.
During the first nine-month period of 2021, the group’s earnings power was enhanced by a 29-percent growth in interest income, while a surge in interest expenses pressured growth in net interest income downward to 23 percent.
Despite the lag in the group’s deployment of growth funds to high yielding assets, its performance was boosted by effective cost strategies that resulted in reduced operating expenses and improved cost-to-asset and cost-to-income ratios.
In a statement to shareholders and capital market observers, Mwangi said that despite the impact of the COVID-19 pandemic on its operating environment, Equity Group has shown a resilient and versatile business model, agility in leadership, strength of strategy, innovation and the ability to diversify to report an 85-percent growth in profit before tax, a 27-percent growth in total assets, and a 25-percent growth in total income.
He explained that the growth in the group’s earning assets was funded by a 48-percent growth in long-term funds and a 27-percent growth in customer deposits of Ksh875.7 billion ($7.84 billion), up from Ksh691 billion ($6.19 billion).
As of press time, Nov. 9, shares in Equity Group Holdings were trading at Ksh51 ($0.4565), 1.49-percent higher than their opening price of Ksh50.25 ($0.4498).
At the current price valuation, the group’s market capitalization is Ksh192.46 billion ($1.72 billion), while the market value of Mwangi’s stake is estimated at KSh6.52 billion ($58.37 million).
