Equity Group has announced a 14% increase in profit after tax for the period ending 31st December 2019 that grew to Ksh. 22.6 billion from Ksh. 19.8 billion in 2018.
The growth was driven by a 23% growth in their loan portfolio which rose to Ksh. 366.4 billion from Ksh. 297.2 billion in 2018. The growth in loan book, saw the Group balance sheet register a 17% growth to reach Ksh. 673.7 billion up from Ksh. 573.4 billion funded by a growth in customer deposits of 14%, shareholders funds of 18% and a 26% growth of long-term borrowed funds.
Speaking during the release of the Group’s results Dr. James Mwangi, Managing Director and CEO said, ‘Execution of the Group’s business strategy continued to yield results as non-funded income contributed 40% of the Group’s total income reflecting quality and diversification of income. Success in our regional expansion and business diversification saw subsidiaries contribution to Group profit after tax rise to 18% up from 15% the previous year.”
Return on average equity (RoAE) from subsidiaries grew to 16.9% up from 13.3%. Subsidiaries assets accounted for 27% of the Group’s total assets while their profit after tax contribution grew to 18% of Group’s profits up from 14% in 2018. Improved efficiencies at the subsidiaries saw their cost structure contribution to the Group improve to 35% from 37% in 2018.
The Group continued to maintain an agile balance sheet with a liquidity of 52.1%, a loan deposit ratio of 75.9% and a core capital to risk weighted asset ratio of 19.8%. The balance sheet reflected solid diversified funding with customer deposits constituting 72% of the total funding, shareholders and long-term borrowing contributing 17% and 8% respectively. Net loans constituted 54% of the total assets while government securities and cash and cash equivalents contributed 26% and 13% of the total asset allocation respectively.
“Our purpose of transforming lives, giving dignity and expanding opportunities for wealth creation and our vision of championing social economic prosperity of the people of Africa is driving our business. Our purpose has become profitable,” added Dr. James Mwangi.