Equity Group Holdings continues to deliver solid financial results, underpinned by the Group’s strategic focus on business diversification, innovation, and regional expansion.
With strong liquidity, capital buffers, and robust regional businesses, the Group is poised to maintain its regional leadership position and drive sustainable growth.
While releasing the full year 2024 results, Dr. James Mwangi, Equity Group Holdings Plc’s Managing Director and CEO, said, “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 economies present diversified levers for growth. The Group’s liquidity and capital position remain very strong, positioning us to better support our customers in the years ahead,” he added.
Equity Group’s 2024 profit
In FY 2024, Equity Group Holdings Plc achieved a Profit After Tax (PAT) of Kshs 48.8 billion, demonstrating the continued success of the Group’s diversified business model and prudent risk management.
The Group’s Profit Before Tax (PBT) grew by 17% to Kshs 60.7 billion, while Earnings Per Share (EPS) rose by 11% to Kshs 12.3, signifying the Group’s sustained strong performance.
In addition, the Group’s total deposits grew to reach Kshs 1.4 trillion, with the customer base growing to 21.6 million, showcasing the scale and reach of the deposit franchise.
The Group’s liquidity position remains strong, with cash and cash equivalents rising by 19% to Kshs 345 billion, while investment securities grew to Kshs 512 billion, contributing to an overall liquidity ratio of 57%. This positions the Group very well to effectively execute the Africa Recovery and Resilience Plan (ARRP), a private sector-led development plan championed by Equity, which is aimed at catalysing, capacitating, connecting, and financing enterprises and households across Africa while enabling trade and investment on the continent.
Beyond providing financial and digital tools and solutions, Equity Group empowers individuals, businesses, and communities through a clear framework for development, by building capabilities and mitigating risks, enabling them to leverage these tools to achieve their social, environmental, and economic ambitions.
The ARRP seeks to drive long-term transformation across the continent, relying on the support and active participation of diverse stakeholders.
What has driven Equity Group’s strong commercial outcomes?
Strategic partnerships with Development Finance Institutions (DFIs), global technology and digital partners, and social impact organisations have been instrumental in enabling the Group to deliver a wide range of social and commercial outcomes with lasting, sustainable results.
As part of these efforts, the Group has partnered with AfDB, Microsoft and Mastercard Corporation to digitize 10 million farming customers under the Community Pass initiative for the delivery of the MADE Alliance, further enhancing financial inclusion and digital accessibility across Africa; and with the World Food Programme to further capacitate small-holder farmers into agribusiness.
The Group demonstrated commitment to its shareholders by proposing a dividend of Kshs 4.25 per share, representing a payout ratio of 34.5%, reinforcing its track record of delivering value to its shareholders. This is underpinned by a return on equity (ROE) of 21.5% and a return on assets (ROA) of 2.8%, both of which are well above industry averages.
Equity Group has adopted a tri-engine model, integrating commercial, social, and sustainability priorities to foster sustainable economic growth and create meaningful societal impact. The Group continues to build on its legacy of resilience, strong governance, long track record of execution, self-disruption, agility, and scalability of its business model to thrive in the different markets it operates in.
It has continued to grow the value it creates for its customers and stakeholders, becoming a regional systemic financial services provider in position one or two in three of the six markets it operates in, Kenya, the DRC, and Rwanda. The Group’s strategic focus on regional expansion and product diversification continues to drive growth with the Group’s regional subsidiaries contributing 49% of total assets, 48% of total loans and 54% of profit before tax, further diversifying the revenue base.
The Kenya subsidiary, while still a major contributor, accounted for 46% of total revenue.
How other Equity Bank subsidiaries performed
Equity Bank Rwanda revenue grew YoY by 36%, Equity Bank Tanzania by 20%, and EquityBCDC by 9%, while PAT for Equity Bank Rwanda grew by 30% YoY, Equity Bank Tanzania by 107%, Equity Bank Uganda 186% and EquityBCDC by 29%, signaling increasing contributions from regional operations.
Equity Bank Kenya has in the past six months cut its base lending rate three times, sending a clear signal of its intent to grow its loan book as Kenya’s economy shows signs of recovery.
The lowering of interest rates will reduce the cost of borrowing, offering businesses access to more affordable credit, while for households, it means increased disposable income, thus stimulating consumer spending.
Due to the global operating environment characterised by unprecedented geopolitical shifts, the Group’s defensive and prudent approach to risk management was evident in its loan loss provisions, which amounted to Kshs 20.2 billion.
The Non-Performing Loan (NPL) ratio remained below the industry average at 12.2%, significantly lower than the 16.4% published industry average. NPL coverage stands at 71%, demonstrating the Group’s strong asset quality.
Equity Life Assurance performance
The Equity Life Assurance business continues to register impressive performance with YoY Profit before tax growing by 58% to Kshs 1.5 billion from Kshs 934 million.
Further, the robust but prudent strategy for investment of policyholder funds resulted in a gross declared return of 13.5%, signalling Equity’s Group capabilities to provide value to the over 14 million policies issued since inception in March 2022.
With an eye on long-term value creation, the Group’s acquisition of a general insurance license, in addition to its existing life assurance license, marked an exciting milestone. This move enhances the Group’s ability to offer a comprehensive suite of insurance solutions, ensuring that customers across all segments, corporate, SME, and retail, can access integrated solutions that protect their lives, health, and wealth.
“As we continue to expand our financial services ecosystem, our Bancassurance unit remains a vital component of our growth strategy. The 6% increase in premium collections, despite the current market challenges, underscores the unit’s potential. To unlock further growth, we invested heavily in the unit’s repositioning, focusing on talent development, digital transformation, and process enhancements.
This medium-to long-term strategy will allow us to deliver a more integrated, customer-centric experience, where insurance is a key layer in our customers’ overall financial well-being. Encouragingly, our insurance premium financing solution has seen a significant 50% increase in uptake, reflecting our dedication to supporting customers through uncertain times as they prioritise protecting their health, life and assets,” said Dr. Mwangi.
