Equity Group Holdings, Kenya’s largest financial services group led by renowned banking tycoon James Mwangi, is on track to deliver another stellar performance this year, with profits in the first six months of 2022 exceeding Ksh24 billion ($200 million) despite a challenging macroeconomic environment fueled by geopolitical tensions and the recent cost of living crisis.
According to Equity Group’s recently published financial statement, its profit at the conclusion of the first six months of 2022 climbed 36 percent from Ksh17.9 billion ($149.3 million) in the first half of 2021 to Ksh24.4 billion ($203.6 million).
The Kenyan lender stated that its half-year results reflect a continued digital transformation, with 99 percent of all customer transactions now taking place outside the branch network.
The digital transition aided its overall performance, as gross operating income increased from less than Ksh52 billion ($430 million) in the first half of 2021 to more than Ksh65 billion ($540 million) in the second half.
“The business transformation has supported recovery and built resilience in the business,” Mwangi, group managing director and CEO, said while commenting on the bank’s financial performance. “Going online and virtual through digitization has brought ease and convenience to our customers resulting in increased uptake of our products and growth of the business.”
Mwangi, who derives the majority of his wealth from a 3.38-percent stake in Equity Group, noted that the company’s good financial performance was supported by an expansion in its loan book, as loans to customers during the period climbed by 29 percent from Ksh504.8 billion ($4.21 billion) to Ksh650.6 billion ($5.42 billion).
“The loan growth was targeted to supporting our clients to recover and rebuild after the COVID-19 business disruptions while allowing re-purposing and retooling for resilience and agility to take advantage of emerging opportunities and green shoots in the real economy,” he explained.
As a result of the improved financial performance, the group’s total assets increased by 19 percent year-on-year, from Ksh1.12 trillion ($9.3 billion) on June 30, 2021, to Ksh1.33 trillion ($11.1 billion) on June 30, 2022, while retained earnings increased from Ksh136.4 billion ($1.14 billion) to Ksh170 billion ($1.42 billion).
At the close of trading on the Nairobi Securities Exchange on Tuesday, shares in the banking group fell 133 basis points to Ksh48.35 ($0.403) per share, while its market cap slumped below Ksh185 billion ($1.54 billion).
Mwangi’s 3.38-percent share in Equity Group is valued at Ksh6.15 billion ($51.3 million) at the current market price.
