COVID-19 weighs on Equity Group’s half-year performance
Equity Group half-year net profit has dropped by 24.3 per cent to $83 million after the lender increased provisioning for loan defaults by nearly nine times amid the shocks caused by the COVID-19 pandemic. Equity Group CEO, James Mwangi joins CNBC Africa for more.
Tue, 18 Aug 2020 14:39:23 GMT
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AI Generated Summary
- The significant drop in Equity Group's half-year net profit is attributed to increased provisioning for loan defaults amid the COVID-19 pandemic.
- The service industry, tourism, travel, and aviation sectors have been significantly affected by the pandemic, leading to challenges for businesses in these areas.
- Equity Group has taken proactive steps to support its customers, increase lending to emerging sectors, and offer loan restructuring to help clients navigate the economic impact of COVID-19.
Equity Group, one of the leading financial institutions in Africa, has reported a significant drop in its half-year net profit, attributing the decline to the challenges posed by the COVID-19 pandemic. The lender's CEO, James Mwangi, revealed that the net profit had decreased by 24.3% to $83 million, primarily due to a substantial increase in provisioning for loan defaults. Mwangi emphasized that the performance reflects the impact of COVID-19 on the operating environment and different business sectors, particularly those significantly affected by the pandemic such as the service industry, tourism, travel, and aviation. Despite the challenges, Equity Group has been proactive in supporting its customers and ensuring business continuity during these uncertain times. The company has increased its lending to enterprises in emerging sectors like the manufacturing of personal protective equipment (PPEs) and agricultural food production, which have shown resilience and growth amidst the crisis. Additionally, Equity Group has implemented measures to accommodate struggling clients, including restructuring loans and providing repayment flexibility to help businesses navigate the economic repercussions of the pandemic. The CEO highlighted the importance of fostering strong relationships with clients and offering support to ensure their survival and eventual recovery. As the global economy continues to grapple with the effects of COVID-19, Equity Group remains committed to adapting to the new business landscape and providing sustainable solutions for its diverse customer base.