Equity Group has reported a 30% growth in its loan book as at 30th September 2020.
While releasing the results for Q3 2020, Dr. James Mwangi, Group Managing Director and CEO said, “We grew our loan book by 30% year on year in order to support our customers who saw opportunities of green shoots and diversification in the Covid-19 environment. Most of the new opportunities we funded were in manufacturing of PPE’s, logistics, online businesses, agro- processing, fast moving consumer goods and agriculture value chains.”
Execution of Equity Group’s twin strategy of being defensive and offensive has proven to be effective despite the challenging environment. Customer deposits registered a 45% growth driven by 51% growth in Uganda, 21% growth in Kenya.
Loans to customers grew by 30% driven by 37% growth in Uganda, 19% growth by Equity Bank Congo, 15% growth in Rwanda, 15% growth in Kenya.
The growth in capital weighted loan book and capital geared customer deposits was on the back of a 27% growth in shareholders’ funds following withdrawal of Equity Group Holdings’ 2019 dividend payout. The balance sheet of the Group grew by 38%.
Regional expansion and business diversification efforts have reduced dependence on Kenya for Group performance making the Group truly a regional financial services provider.
Regional subsidiaries now contribute 40% of customer deposits, 39% of Group total assets, 33% of the loan book, 30% of the Group’s revenue and 25% of the Group’s profit before tax.
On the defensive strategy the Group increased its capital base by 27% to fortify the balance sheet. The Group’s liquidity position strengthened to 55.7% driven by a 61% growth in cash and cash equivalents and a 34% growth in Government securities.
Maintaining its conservative and prudent approach and in recognition of the challenging operating environment, the Group increased its loan book provision eleven-fold compared to the same period last year, registering a cost of risk of 4.8% up from 0.8% the corresponding period last year.
“We are focused on increasing the chances of our customers surviving the Covid-19 challenges, transforming themselves by walking with them and hand-holding them with our knowledge, skills and Group resources. During these extra-ordinary times our performance measures has changed from numbers to lives and livelihoods supported, changed, enhanced and transformed,” concluded Dr. Mwangi.