Kenyan lender Equity Group half-year profit up 12.5% to $229m
TLDR
- Equity Group, Kenya's largest bank, sees 12.5% net profit increase to $229 million in H1 2024 despite challenging economic conditions.
- Strong performance driven by a 22% rise in interest income to $656 million, showcasing regional expansion success.
- Regional operations growth offsets domestic market earnings decline, emphasizing strategic focus on expansion.
Equity Group, Kenya’s largest bank by market capitalization, reported a 12.5% increase in net profit for the first half of 2024 at $229 million (KES29.6 billion). That's up from $203.4 million (KES26.3 billion) in the same period in 2023.
This growth occurred despite challenging macroeconomic conditions leading to higher loan defaults. The bank's robust performance was driven by a 22% rise in interest income, totaling $656 million (KES84.8 billion), against a backdrop of high inflation and interest rates.
Equity Group's success highlights its strategic focus on regional expansion, which has compensated for slower growth in Kenya’s economy. The double-digit growth from its regional operations has helped offset a decline in earnings from its domestic market.
Key Takeaways
Equity Group recorded a 16% increase in non-interest income, reaching $737.2 million, while customer deposits grew 11% year-on-year to $10 billion (KES1.3 trillion). The bank's customer base expanded to 20.7 million, contributing to a 55% rise in cash and cash equivalents to $2.6 billion (KES341 billion) and a growth in investment securities to $3.5 billion (KES459 billion). Despite these strong results, the bank did not declare an interim dividend for the first half of the year. Equity Group trades under the ticker symbol EQTY on the Nairobi Securities Exchange (NSE) and closed the previous session at KSh 39.95, marking an 18.7% year-to-date gain. With a market capitalization of KSh 151 billion, EQTY is the second most valuable stock on the NSE, accounting for approximately 9.4% of the equity market.
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