Equity Group’s net profit jumps 20pc
By Patrick Alushula | May 11th 2016
Equity Group has reported a 20 per cent increase in net profit to Sh5.1 billion for first quarter ended March 31, 2016. This compares to Sh4.2 billion recorded in a similar quarter in 2015.
The growth was supported by a 35.6 per cent growth in loan book which pushed interest income from loans and advances to Sh11.2 billion. In the same quarter, interest income from government securities made 24.8 per cent leap to see overall interest income grow by 36 per cent to Sh12.8 billion.
However, its operating expenses went up by 17.4 per cent to Sh8.35 billion on account of increased staff costs and loan loss provision.
Provision for bad loans increased by 103.6 per cent to Sh704.9 million compared to Sh346.1 million provided for in a similar quarter last year.
Staff costs, which had dropped during the release of full year results, rose again by 21.5 per cent to Sh2.99 billion when compared to Sh2.46 billion in a similar quarter in 2015.
Group Managing Director James Mwangi said non-performing loans stood at 3.8 per cent against 4.3 per cent in a similar period last year. “South Sudan contributed to 0.2 per cent growth of our total loan book in the first quarter of 2016, Uganda 2.5 per cent, Rwanda 3.1 per cent, DRC 5.2 per cent, Tanzania 5.6 per cent and Kenya 83.4 per cent,” said Mwangi.
Agency banking transactions value as at end of March stood at Sh102.1 billion up from Sh74.5 billion in the first quarter of 2015. Quarter to quarter mobile transactions through Equitel rose by 315 per cent to Sh45.6 million. The shift from brick and mortar to digital transaction saw its cost to income ratio reduce from 51 per cent to 49 during the reporting period.
Insider lending increased by 9.1 per cent to Sh8.3 billion. Shareholder’s funds grew by 13 per cent to Sh69.1 billion as assets hit Sh430.1 billion from Sh372.5 billion.
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