Equity Group made Kshs. 26.9 billion in net profit during the first nine months of this year, representing a 79% year-on-year increase.

The lender attributes the performance to higher interest income which grew to Kshs. 67 billion and a 68% reduction in provisions for bad loans at Kshs. 4.6 billion.

Unlike the previous year when Equity’s profit fell 20% and its provisions for bad loans rose 11-fold, the first nine months of 2021 have seen the top tier lender increase its margin.

This was powered by higher Group total funding that rose 27% driven by growth in customer deposits by 27% to Kshs. 875.7 billion.

This was supported by the growth in loan book by 23% to Kshs. 559 billion.

The performance is largely attributable to recovering income streams from COVID-19 related disruptions.

Equity’s total operating expenses reduced 3.3% to Kshs. 43.8 billion due to a reduction in loan-loss provisioning by 68% to 4.6 billion from Kshs. 14.3 billion during a similar period last year.

The ratio of non-performing loans fell to 8.9% from 10.4%.

The Group accommodated loans worth Kshs. 171 billion owing to COVID-19 disruptions of which loans worth Kshs. 122 billion have resumed repayment.

“We are glad we accommodated our customers to adapt to the COVID-19 environment, to adjust, repurpose and retool their businesses to be fit for purpose in the new normal. This not only kept the lights of our economies on, but helped a lot of businesses survive, retain their employees, support their families and reduce transition of a health pandemic into a social an economic meltdown” said Dr James Mwangi, Equity Group CEO.

Kshs. 4 billion have been downgraded to Non Performing Loans with Kshs. 45 billion constituting 7% of the total outstanding gross loan book of Kshs. 608 billion.

The bank’s total operating income expanded by 25.6 % to Kshs. 80.5 billion on account of 24 % growth in interest income while non-interest funded income grew by 39% to Kshs. 31.4 billion.

By Fred Azelwa.