Equity Group has posted a Ksh. 5.2 Billion net profit for the period ended 31st March 2020. This marks a 14 percent drop in profitability from the Ksh. 6.1 Billion posted in a similar period last year.
The drop in profitability was due to a rise in the loan loss provision from Ksh. 300 Million to Ksh. 3 Billion. This was necessitated by a rise in bad loasn from Ksh. 29.3 Billion to Ksh. 44.6 Billion, mainly due to traders whose supply chains have been disrupted by impact of the coronavirus.
During the period, net interest income grew by 11% to Kshs. 379.2 billion. The total income grew by 13% to Kshs. 19.7 billion up from Kshs. 17.5 billion for the same period last year. Forex trading income grew by 34% to Kshs. 1.1 billion up from Kshs. 815 million. Diaspora remittances commissions grew by 22% to Kshs. 234 million up from Kshs. 192 million the previous year. Merchant banking commission grew by 11% to Kshs. 582 million up from Kshs. 523 million the previous year.
The bank recently announced that they had restructured Ksh. 92 billion or 25.1 percent of its loan book due to the pandemic. It also recalled the proposed dividend payout of Sh2.50 per share or a total of Sh9.4 billion to conserve cash as the coronavirus bites.
Dr. James Mwangi, Group Managing Director and CEO, had this to say, “The global COVID-19 pandemic has mutated into a global economic crisis, occasioned by a sudden standstill of economic activity as a result of the global lockdown. This has introduced unprecedented uncertainty within the global financial systems prompting us to adopt a conservative approach – fortifying our balance sheet and assuring ample liquidity to support our customers.”