- The lender grew net earnings by 15% to reach Sh46.1 billion
- At least 97% of all Group transactions are on customer self-service on their own devices
Equity Bank investors to share Sh15.1 billion in dividends on a historic net profit
Shareholders of Equity Bank Group will earn Sh4 per share, 33 per cent up compared to the previous year as the lender recorded the highest net profit in Kenya’s banking history.
Speaking at an investor briefing for the year ended December 31, 2022, Equity Bank Group MD James Mwangi said the lender grew net earnings by 15 per cent to reach Sh46.1 billion up from Sh40.1 billion.
This was driven by a 28 per cent growth in the total income of Sh144.3 billion, made up of Sh58.3B of non-funded income, which grew by 33 per cent and net interest income of Sh86 billion which grew by 25 per cent.
He revealed that a 73 per cent growth in gross trade finance revenue underpinned by a 37 per cent growth in trade finance guarantees and off-balance sheet items drove the growth of non-funded income.
Total cost peaked at Sh84.5 billion after a 39 per cent growth driven by 180 per cent growth on loan loss provision of 13.7 billion up from Sh4.9 billion to achieve 94 per cent NPL coverage at a 2.4 per cent cost of risk.
The staff cost grew by 30 per cent to Sh24.8 billion, up from Sh19.1 billion as the Group hired to strengthen and deepen its executive leadership and management bench while strengthening talent and fortifying organizational governance structure as a platform for takeoff.
This saw the lender’s gross earnings drop by 47.2 per cent to Sh59.8 billion compared to Sh113.4 billion reported the previous year.
“The Group’s 2022 results reflect the resilience that the business has developed , strategically positioning the business to navigate the evolving macroeconomic headwinds and turbulence in the financial and economic sectors,'' Mwangi said.
Geographical expansion and business diversification continued to strengthen the resilience and risk mitigation of the Group.
The Kenyan banking business’ dominant performance continued to decline with the strong showing of other subsidiaries which contributed 44 per cent of the Group’s assets and an equivalent 44 per cent contribution to total revenue.
“With its strong efficiency, economies of scale, and maturity, Kenya contributed to 70 per cent or Sh33.4 billion of the profit after tax, leaving the other subsidiaries to contribute Sh14.7 billion of net profit.
The time it takes for a subsidiary to reach a four per cent Return on Assets has reduced from 16 years to 12 years and may reduce further as the region consolidates as the fastest-growing region in the world.
At least 97 per cent of all Group transactions are on customer self-service on their own devices driving efficiency gains, ease and convenience to customers and reduction of fixed and variable costs.
The Group’s latest breakthrough is digital e-Commerce payments through Pay with Equity (PWE) rails following the wave of mobile and internet banking usage by customers.
Pay With Equity transactions grew by 393 per cent to 131.5 million transactions while the volume of business transacted grew by 281 per cent to KES 524B during the year.
Internet banking transactions grew by 212 per cent to 10.7 million transactions while the value grew by 136 per cent to Sh311 billion.