Equity Group halfyear net profit surges to Sh43.8b as StanChart's slides by 17pc

Equity Group Holdings’ first-half net profit rose by 32 per cent to a record Sh43.80 billion, while Standard Chartered Bank Kenya’s profit fell by 16.8 per cent as lower lending margins hurt earnings, showing mixed performance across Kenya’s banking sector.

According to financial results released on Wednesday, Equity’s net profit climbed to Sh43.80 billion from Sh33.31 billion posted a year earlier, driven by balance‑sheet expansion, a surge in non‑funded income and stronger contributions from regional subsidiaries.

The report further shows that total operating income hit Sh124.9 billion, with non‑interest income, fees, commissions and trading revenue, leaping by 36 per cent to hit Sh55.6 billion, now accounting for 44.5 per cent of total income.

"Equity’s half‑year 2026 performance is the outcome of a multi‑year transformation agenda focused on resilience, diversification and technology enablement,” Group Managing Director and CEO James Mwangi said at an investors’ briefing in Nairobi.

Also, the lender’s balance sheet expanded 20 per cent to Sh2.16 trillion, anchored by a 21 per cent rise in customer deposits to Sh1.59 trillion and a 19 per cent increase in net loans to Sh981 billion.

Subsidiaries outside Kenya also contributed to 42 per cent of the group banking profitability and 47 per cent of the banking revenue, while accounting for 54 per cent of loans and 52 per cent of banking assets.

Equity BCDC in the Democratic Republic of Congo posted a 30 per cent rise in profit after tax to Sh11.8 billion, while Equity Tanzania recorded the strongest growth with profits surging by 82 per cent to Sh2 billion. Equity Bank Kenya, the group’s largest unit's profit after tax grew to Sh25.7 billion, a 32 per cent increase.

The Group's asset quality also improved alongside the credit expansion, with the non‑performing loan ratio falling to 9.5 per cent from 13.7 per cent while the cost‑to‑income ratio declined to 48.6 per cent from 51.7 per cent.

Mwangi said the economies where Equity operates are expected to remain among the world’s fastest‑growing, with Kenya projected to expand by 4.5 per cent to five per cent, the DRC by 5.6 per cent, Tanzania by 5.9 per cent, Uganda by 6.4 per cent and Rwanda by 6.8 per cent.

Meanwhile, Standard Chartered Bank Kenya, separately reported a 16.8 per cent drop in its net profit  for the six months that ended on June, a fall from Sh8.09 billion a year earlier to Sh6.73 billion, as the Central Bank of Kenya’s rate‑cutting cycle squeezed lending margins.

Net interest income also declined by 19.8 per cent to Sh12.27 billion, accounting for most of the profit erosion. Total interest income dropped to Sh14.20 billion as yields on loans and government securities tracked the central bank’s benchmark rate down from 13 per cent in early 2025 to 10.75 per cent by mid‑2026. Interest expenses fell too, but at a slower pace, leaving the bank earning less on each shilling lent out.

The bank’s non-interest income rose by 15.9 per cent to Sh7.86 billion, helped by a 16.4 per cent increase in foreign exchange trading income to Sh2.32 billion.

However, total operating income fell by 8.8 per cent to Sh20.14 billion while loan loss provisions also plugged sharply, falling 56.9 per cent to hit Sh507.7 million.

The bank's net loans and advances grew 11.1 per cent to Sh169.17 billion, while total assets rose by 12.4 per cent to Sh418.13 billion and customer deposits increased 6.4 per cent to Sh309.11 billion.

Despite the profit decline, Standard Chartered Bank Kenya board declared an interim dividend of Sh8.50 per share for the half‑year ended June 2026, representing a total payout of Sh3.21 billion based on the bank’s 377.86 million issued shares. The dividend, up by 6.3 per cent from Sh8 a year earlier, came despite the 16.8 per cent drop in net profit underscoring the board’s confidence in the lender’s capital position and cash generation.

The results were released under new leadership. Birju Sanghrajka who took over as Managing Director and CEO in April, succeeding Kariuki Ngari after his exit.

The contrasting results come as Standard Chartered’s global parent reported a record first half, with group net profit up 10 per cent to $3.37 billion.