Equity net profit for 2014 jumps 29pc to Sh17 billion

Equity Chief Executive James Mwangi during an investor briefing and release of the 2014 full year financial results at Equity Centre, Nairobi yesterday. [PHOTO: BEVERLYNE MUSILI/STANDARD]

Equity Group Holdings, the parent to Equity Bank, posted a 29 per cent net profit growth in the year ended December 31, 2014, helped by increased lending and transaction-based earnings.

The bank’s net profit in the period stood at Sh17.2 billion compared to Sh13.3 billion the year before. The bank, which includes subsidiaries in Kenya, Uganda, Rwanda, South Sudan and Tanzania, saw its pretax profit rise to Sh22.4 billion in 2014, up from Sh19.2 billion in 2013, due to a rise in net interest income and loan book.

Interest income increased by 10.9 per cent to Sh35.3 billion on increased lending that saw the loan book grow by a quarter to Sh214 billion. Other income, including fees charged on transactions, increased by a fifth to Sh18.4 billion.

“There has been anxiety concerning delays in releasing our 2014 full year financial results. We have been developing the required templates that can enable us report accurately on both the banking and non–banking business of the newly formed non-operating holding company,” Equity Group CEO James Mwangi said during an investor briefing and release of the 2014 full year financial results at Equity Centre yesterday.

Last year, the bank completed its re-organisation which saw the creation of a listed non-operating holding firm ‘Equity Group Holdings Ltd’ following the hiving off of the banking business in Kenya to a new subsidiary ‘Equity Bank Kenya Limited’.

The non-operating company includes all the banking subsidiaries, the investment banking arm, brokerage services, custodial business, advisory and consultancy, insurance and yet to be launched Equitel - a platform that will link Equity customers to a telecoms platform.

data platform

“We have already spent Sh800 million, a one off expense to set up a single data platform that will link up all our subsidiaries in the region as well staff recruitment to set up the holding company,” said Mwangi.

This expense has, however, been offset by the Sh1.1 billion realised from disposal of Equity Group’s shareholding in Housing Finance. “The Sh1.1 billion was non-taxable implying that our tax burden went down by 10 per cent, the two transactions having a neural impact on our profitability,” said Mwangi.

The Group’s performance was also boosted by 24 per cent growth in balance sheet to Sh345 billion from Sh278 billion in 2013. Aggressive lending resulted into a corresponding growth of 25 per cent in net loans and advances to Sh214.2 billion up from Sh171.4 billion.