Equity Group Holdings, Kenya’s largest financial services group led by renowned banking tycoon James Mwangi, has reported a record-high profit of Ksh40.1 billion ($350.2 billion) at the end of its 2021 fiscal year, owing to improved performance across all operating segments.
According to figures in the lender’s financial results published today, its profit after tax at the end of 2021 increased by 99 percent from Ksh20.1 billion ($175.5 million) in 2020 to Ksh40.1 billion ($350.2 million), retaining its position as not only Kenya’s largest lender but also the most profitable bank in East Africa.
The strong performance of the financial services group in 2021 may be attributed to a steady growth in interest and non-interest income, as well as well-executed cost and treasury management strategies throughout the year.
According to the bank’s recently published financial statement, interest income rose by 27.9 percent over the 12-month period, from Ksh73.76 billion ($644.2 million) in 2020 to Ksh94.35 billion ($834.02 million), driven by a 23-percent increase in its loan book and an 81-percent increase in investment in government securities.
Non-interest revenue increased by 15.76 percent from Ksh38.51 billion ($336.3 million) to Ksh44.58 billion ($389.33 million), owing to a 55-percent growth in trade financing, a spike in income earned through its payment channels, and an increase in foreign currency trading income.
Despite the impact of the pandemic on financial assets, Equity Group’s balance sheet expanded by 29 percent, from Ksh1.015 trillion ($8.9 billion) to Ksh1.305 trillion ($11.44 billion). The increase in bank assets was driven by a 29-percent increase in customer deposits, which increased to Ksh959 billion ($8.37 billion) from Ksh740.8 billion ($6.47 billion) last year.
“We have strengthened our business model to achieve an embedded shared value concept in our twin-engine of social and economic aspirations and deliverables. We have scaled our social and environmental impact investments in capacity building and enhancement through education, health, and entrepreneurship training,” Mwangi said, while commenting on the bank’s performance.
“We have strengthened our participation in formalizing and integrating the informal sector in the real economy with the formal supply chains and ecosystems of agriculture, micro, small and medium enterprises,” he added.
The bank has grown to become East and Central Africa’s largest financial services firm under the leadership of Mwangi, who is scheduled to retire from Equity Group in 2032.
According to Brand Finance, a brand valuation consultancy business based in London, the Kenya-based lender was rated the world’s fifth-strongest banking brand as a result of its diverse operations that continue to produce value.
As a consequence of the bank’s financial success in 2021, the board of directors proposed a dividend of Ksh3 ($0.0262) per share, a total pay-out to shareholders of Ksh11.3 billion ($98.7 million). This is a 50-percent increase over the company’s previous dividend payment in 2018.
