Equity Group capped its 2024 financial year with a strong performance, reporting a net profit of Sh48.8 billion, which reflects a 12% increase from the previous year.
This growth was supported by a 17 per cent rise in profit before tax (PBT) to Sh60.7 billion and an 11% increase in earnings per share (EPS) to Sh12.3.
Group Chief Executive Officer and Managing Director James Mwangi said the lender’s diversified business model and strategic expansion throughout East and Central Africa have positioned it as one of the region’s most resilient financial institutions.
“We are proud of the resilience demonstrated by the Group amidst a challenging global economic landscape. Our financial strength gives us the flexibility to seize opportunities as the regional economy presents diversified levers for growth. The Group’s liquidity and capital position remain strong, positioning us to better support our customers in the years ahead,” Mwangi said.
Equity’s subsidiaries outside Kenya continue to play an increasingly vital role in the Group’s earnings, now accounting for 49%of total assets and 54% of profit before tax. This shift highlights the success of its regional expansion strategy, which has helped protect the bank against market-specific risks.
Among the standout performers, Equity Bank Rwanda experienced a 36% increase in revenue, while Tanzania and the Democratic Republic of the Congo (DRC) reported growth of 20 per cent and 9%, respectively. The subsidiaries’ profitability surged even higher, with Equity Bank Uganda’s net profit rising 186%, Tanzania’s more than doubling at 107%, and DRC’s increasing by 29%.
Mwangi, said the figures underscore the Group’s ability to navigate diverse markets while capitalizing on growth opportunities. Equity’s expansion has also played a crucial role in enhancing financial inclusion, with its customer base reaching 21.6 million in the region.
Despite a challenging macroeconomic environment, Mwangi said Equity Group strengthened its asset quality, improving its Non-Performing Loan (NPL) ratio by 100 basis points through 2024. The NPL ratio stood at 12.2%, below the industry average, with an NPL coverage of 71%. The Group’s loan loss provisions totaled Sh20.2 billion, reflecting a conservative approach to risk management.
“Our prudent risk management framework ensures that we maintain strong asset quality, which is essential for sustainable growth,” Mwangi noted.
The Group’s liquidity position remains solid, with total customer deposits growing to Sh1.4 trillion and cash and cash equivalents increasing by 17% to Sh339 billion. Investment securities expanded to Sh512 billion, contributing to an overall liquidity ratio of 57%.
Mwangi said Equity’s commitment to delivering shareholder value is evident in its proposed dividend per share of Sh4.25, translating to a payout ratio of 34.5%. The Group’s return on equity (ROE) stood at 21.5%, while return on assets (ROA) was 2.8%, both significantly above industry benchmarks.
The Group’s insurance business also delivered strong results, with Equity Life Assurance reporting a 58% year-on-year growth in profit before tax to Sh1.5 billion. Since its inception in March 2022, the business has issued over 14 million policies, reflecting the Group’s ability to leverage its extensive customer base to deepen insurance penetration.
“Our ability to provide value to policyholders while ensuring strong returns on invested funds has been key to the success of our insurance business,” Mwangi said. The Group reported a gross declared return of 13.5% on policyholder funds.
In Kenya, Equity Bank has actively contributed to economic recovery efforts by lowering its base lending rate three times over the past six months. Mwangi said this initiative aims to stimulate credit uptake, particularly among businesses and households, as Kenya’s economy shows signs of stabilization. By making credit more affordable, Equity hopes to drive private sector growth while enhancing disposable income for households.
“We recognize that lowering the cost of borrowing is critical in enabling businesses to grow and individuals to improve their financial well-being,” Mwangi said.
Equity Bank achieved substantial growth across its financial platforms. The business processed through Equity Mobile surged by 67% to Sh3.174 trillion, while Online for Business (EazzyBiz) expanded by 21 per cent to Sh3.841 trillion. Pay With Equity (PWE) for merchants increased by 14%, reaching Sh2.149 trillion. ATM transactions grew by 21 per cent to Sh481.4 billion, driven by the adoption of Cash Deposit Machines. Branch transactions also rose by 21% to Sh5.046 trillion, as Equity Bank shifted focus toward SMEs, corporates, and large enterprises.
