Equity Group delivers solid Q3 results

Equity Group has reported a 79% growth in profit after tax for the nine months ending in September this year. The CEO, James Mwangi, credited this remarkable performance to several key drivers that propelled the bank's success. One of the main factors contributing to this growth was the bank's focus on technology and digital innovation, which played a significant role in navigating the challenges brought on by the COVID-19 pandemic. Mwangi highlighted that the bank's balance sheet expanded by 27%, driven by a substantial increase in customer deposits, which in turn facilitated a 22% growth in the loan book. This growth translated into a 78% increase in profit after tax. The bank's balance sheet now stands at a commendable 11.2 billion US dollars, serving a customer base of 11.2 million. Mwangi emphasized that the bank's strong performance was also driven by strategic initiatives implemented during the pandemic, such as focusing on non-funded income which grew by 27%. This, coupled with an efficient cost management strategy and a focus on the quality of the loan book, led to improved financial metrics for the bank. Mwangi highlighted a significant decrease in non-performing loans, with NPLs improving from 11.8% to 8.9%, well below the industry average. Additionally, the bank's robust performance in foreign exchange transactions and trade finance instruments further bolstered its revenue streams. Another key factor contributing to Equity Group's success was its investment in government securities, which surged by 62% during the period. This strategic move was a response to a slowdown in private sector lending due to the uncertainties brought on by the pandemic. The bank's subsidiaries in six countries across the region also delivered stellar performances, with notable growth in profits and asset bases. Uganda and the Democratic Republic of Congo (DRC) emerged as particularly strong markets for the bank, driven by untapped opportunities and promising economic outlooks. Mwangi underlined the potential in DRC, citing the country's low financial inclusion rate and significant population size as factors driving growth for Equity Group's operations. The CEO revealed that the bank is not currently eyeing expansion to new countries but is focused on consolidating its presence in the region. Equity Group's decision to withhold dividends in 2019 and 2020 in order to strengthen its capital ratios was a strategic move to cushion the bank and its customers during the height of the pandemic. Mwangi explained that the capital retained from dividends was redirected towards supporting customers through loan repayment breaks and fortifying the bank's resilience amidst the crisis. With the economic landscape showing signs of recovery, the bank has now implemented a policy to ensure a minimum dividend payout of 30% of attributable profits every year. Moving forward, Equity Group is poised to leverage its strong performance and strategic initiatives to drive growth, foster cross-border trade, and support regional economic development.