Equity Quarter One 2020: Equity Bank has posted a Sh. 900 million decline in quarter one profit. The bank realized Sh. 5.2 billion in net profits in the first three months this year compared to the Sh. 6.1 billion it realized in the same period the previous year. This decline represented a 14 percent decline.
Equity Bank also revealed that the rate of default on loans had increased significantly, with bad loans rising to Sh. 44.6 billion from Sh. 29.3 billion. This rise was majorly contributed by traders whose supply chains were disrupted when China closed down early this year due to Covid-19.
Equity Bank cancels Sh. 9.4 billion dividend payout over coronavirus
“The global COVID 19 pandemic has mutated into a global economic crisis, occasioned by a sudden standstill of economic activity as a result of the global lock down. This has introduced unprecedented uncertainty within the global financial systems prompting us to adopt a conservative approach fortifying our balance sheet and assuring ample liquidity to support our customers,” Equity Group chief executive officer James Mwangi said.
The lender’s loan book has however grown from Sh. 305.5 billion to Sh. 379.2 billion boosting interest incomes from Sh. 13.4 billion to Sh. 15.4 billion. Non-interest income grew by 15.7 per cent to Sh.8.3 billion while forex trading income grow by 34 per cent to Sh. 1.1 billion up from Sh. 815million.
The release of the quarter one financial results came hot on the heels of the announcement that Equity was pulling out its annual dividend of Sh. 9.4 billion.
The bank had proposed to pay out a dividend of Sh. 2.50 per share. This dividend pay was due for payment on July 24. It had been proposed after the bank recorded a net profit of Sh. 22.6 billion for year ended December 31 2019. The financial results show that Equity recorded a 14 per cent profit after tax growth to Sh. 22.6 billion from Sh. 19.8 billion in 2018. This performance was largely driven by a 23 per cent growth in loan book to Sh. 366.4 billion from Sh. 297.2 billion in the previous year. Equity Quarter One 2020.