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Equity Group, East Africa’s largest lender by customer numbers, has reported a KSh8.6 billion net profit at the end of the first quarter of 2021, a 63% improvement from KSh5.3 billion reported in the same period in 2020.
The bank’s primary source of revenue, interest income, rose by 32% to KSh20.3 billion from KSh15.4 billion in March 2020, supported by increased lending. Equity’s non interest income, which is comprised of fees and commissions income on loans and advances, foreign exchange trading income, dividend income and other sources of income, increased to KSh10.9 billion at the end of March this year, from KSh8.3 billion in March 2020.
Operating expenses increased to KSh14 billion in the period under review compared to KSh12.9 billion posted in March 2020.
Due to the challenging economic situation in Kenya in 2020, borrowers struggled to repay debt and as a result, the group’s bad loans increased to KSh63.5 billion at the end of the first quarter of 2021 from KSh44.6 billion in the same period last year.
In August 2020, the regional lender successfully acquired 66.5% ownership in Banque Commerciale Du Congo, situated in the Democratic Republic of Congo (DRC), at a cost of $95 million (KSh10.2 billion).
Following the acquisition, Equity’s customer deposits shot up by 58% to KSh790 billion at the end of Q1 2021, from KSh499 billion in March 2020 before the acquisition of the DRC bank. Loans and advances to customers increased by 29% to KSh488 billion at the end of March 2021 compared to KSh379 billion at the end of March 2020.
Also read: Equity Bank Unveils New DRC Identity after BCDC Acquisition
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