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Equity's quarter one net profit on income climbs 36pc to Sh11.8b

BUSINESS
By Patrick Alushula | May 13th 2022 | 2 min read
By Patrick Alushula | May 13th 2022
BUSINESS
Dr. James Mwangi, Equity Group Managing Director and CEO. [Wilberforce Okwiri, Standard]

Equity Group’s net profit for the first quarter of the year has risen by 36 per cent to Sh11.86 billion on increased interest and non-interest income.

According to the lenders’ disclosures released yesterday, net earnings rose from Sh8.6 billion posted in the quarter ended March 2021, continuing with the growth trajectory experienced last year.

Net interest income rose from Sh14.82 billion to Sh19.35 billion, while non-interest income—mainly fees and commissions—hit Sh11.91 billion from Sh10.86 billion.

Operating expenses, however, rose from Sh6.7 billion to Sh7.4 billion, driven by growth in staff costs and provisioning for loan defaults.

While provisioning for loan losses rose by 43.7 per cent to Sh1.81 billion, staff costs increased by 24 per cent to Sh4.98 billion.

Group Chief Executive James Mwangi said subsidiaries increased their profit after-tax contribution to 30 per cent, underlining their growing significance in lowering dependence on Kenya.

“Equity Group has eased its defensive strategy deployed during the economic uncertainty caused by Covid-19 as the global economy continues to recover from the pandemic,” said Mr Mwangi.

The Democratic Republic of Congo (DRC) unit remained the most profitable operation outside Kenya with a net profit of Sh1.4 billion for the quarter. The Ugandan unit returned a net profit of Sh900 million followed by Rwanda (Sh600 million), and South Sudan and Tanzania, each with Sh200 million for the reporting period. The Group has injected an additional $100 million (Sh11.5 billion) into its DRC subsidiary as it eyes to fund mining and manufacturing companies in the country.

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