Two of Equity Group subsidiaries, Equity Bank Uganda and Equity Bank South Sudan have recorded 84% and 62% in Profit After Tax respectively, even amid the ongoing COVID-19 pandemic.
The increase, has been attributed to exports and imports growing in Q3 in Uganda, suggesting that both foreign and domestic demand strengthened in the period amid a further easing of restrictions. In Q4, the private sector activity was at its highest level since the breakout of the pandemic, highlighting a sharp improvement in business conditions as further restrictions were removed.
In South Sudan, the group attributes the growth to a key partnership with the International Monetary Fund in Q4 2020. As a result of the partnership, the Republic of South Sudan received a Ksh. 5.606 billion ($52 million) emergency disbursement under the Rapid Credit Facility to help its economy weather the shock arising from the pandemic.
South Sudan’s economy rebounded in 2019, with growth estimated at 5.8%, attributed to increased oil supply following the reopening of oil fields and resumption of production.
Commenting on the performance, EGH Managing Director and Chief Executive officer Dr. James Mwangi said, “The previous global pandemic was the Spanish Flu which occurred in 1919, a century back, and hence the world had lost its memory and had to re-learn, adapt and adjust making 2020 an exceedingly difficult and challenging year. Our corporate purpose of Transforming lives, giving dignity and expanding opportunities for wealth creation became the guiding compass of the organization’s essence on how to navigate through the crisis and the challenging environment. Our results and performance became a human story of resilience and determination to live an ethical human purpose.”
With the development of COVID-19 vaccines and the world embracing vaccination, the Group is optimistic that the health crisis caused by the pandemic will in time be brought under control.
“The strong Group liquidity ratio of 59.3% and strong loan/asset ratio of 47% and loan/deposit ratio of 64.5% offers the Group an excellent opportunity to execute an offensive strategy while keeping risk under control. The Group expects the cost of risk to normalize going forward given the improving economic environment as well as the high NPL coverage of 89.4% for 2020,” said the group in its FY 2020 financial statement.
Besides the two subsidiaries, the entire group weathered the COVID-19 disruption to register a 51% growth in its balance sheet with total assets growing to Ksh. 1.015 trillion up from Ksh. 674 billion the previous year.
The growth delivered through both organic and merger and acquisition strategies saw the group become the first financial institution to cross the trillion shillings in East and Central Africa. The growth has been driven by a 53% increase in customer deposits which grew to Ksh. 741 billion up from Ksh. 483 billion. Long-term debt financing grew by 71% to Ksh. 97 billion from Ksh. 57 billion with shareholders’ funds growing by 24% to Ksh. 139 billion up from Ksh. 112 billion.