Equity Group has posted a net profit of Ksh. 20 Billion for the full year 2020, this was a 11.6% decline from the previous year.
This drop in profitability was on the back of a 67% increase in the total operating cost to Ksh. 71 Billion. This was driven by a 496% growth in loan loss provision of Ksh. 26.6 Billion up from Ksh. 5.3 Billion in the previous year. Also , during the year, the bank waived Ksh. 1.2 Billion on mobile banking charges and a loan restructuring of up to 45% of the loan book to enable their customers cope with the pandemic.
Net interest income grew by 23% to Kshs 55 billion driven by a 30% growth on customer loan book and 26% growth in investment in Government securities. Non-funded income grew by 27% to reach Kshs 38 billion to contribute 41% of the total income. Forex trading income grew by 77% to stand at Kshs 6.2 billion. Diaspora remittances commissions grew by 76% to Kshs 1.5 billion . Volume of Forex trading increased by 51% to Kshs 863 billion with Diaspora remittance contributing 32% of the volume of forex traded.
The Group weathered the COVID-19 disruption to register a 51% growth in its balance sheet with total assets growing to Kshs 1.015 billion (One trillion and fifteen billion shillings) up from Kshs 674 billion the previous year. The growth delivered through both organic and merger & acquisition strategies saw the group become the first financial institution to cross the trillion shillings rubicon in East and Central Africa. The growth has been driven by a 53% increase in customer deposits which grew to Kshs 741 billion up from Kshs 483 billion, while long-term debt financing grew by 71% to Kshs 97 billion from Kshs 57 billion with shareholders’ funds growing by 24% to Kshs 139 billion up from Kshs 112 billion.
Deployment of the 51% growth of funding enabled loans to customers grow by 30% to Kshs 478 billion up from Kshs 366 billion. Cash and cash equivalents grew by 186% to Kshs 247 billion up from Kshs 86 billion. Investment in Government securities grew by 26% to Kshs 217 billion up from Kshs 172 billion.
During the year, branches handled less than half of transaction value, accounting for only 37.4% of such value with the 62.6% of the value of transactions taking place outside the branch. Adoption of digital payments was accelerated with the number of transactions processed over the Pay with Equity solutions growing by 31% and the value of the transactions growing by 58% to reach Kshs 2 trillion up from Kshs 1.3 trillion.
The Group also intensified its social impact investments for shared prosperity with communities. Cumulative spend on shared prosperity programmes reached Kshs. 51 billion equivalent of US$ 464,515,524. The Group’s flagship secondary school scholarship programmes, Wings to Fly and Elimu, delivered in partnership with Mastercard Foundation, KfW and Government of Kenya reached 26,304 beneficiaries. Pre-university paid internship beneficiaries reached 6,713 while scholars who had attended universities reached 13,775 with633 scholars attending or alumni of global universities.
The board did not recommend any dividend on this performance, extending the freeze to two years. Equity’s last dividend payout was on the 2018 performance, with shareholders taking home Sh7.54 billion.