Equity Group has posted a full year profit after tax declined of 5 per cent to Sh. 43.7 billion down from Sh. 46.1 billion.
This decline hass been attributed to interest expense growth of 53 per cent compared to a 30 per cent growth rate of interest income in the previous year.
Despite the profit reduction, Equity Group Holdings has proposed a record dividend of Sh. 15.1 billion for a second year running.
“The Sh. 4 per share dividend amounts to a 36 per cent payout of the Sh. 43.7 billion profit after tax or Sh. 11.1 earnings per share and a dividend yield of 11.9 per cent on the 2023 year-end closing share price of Sh.33.65 or 800 per cent on par value,” said Equity Group chief executive officer Dr. James Mwangi.
During the period under review ,net interest income grew by 21 per cent to Sh.104.2 billion up from Sh. 86 billion while non-funded income registered an impressive 30 per cent growth to Sh. 75.9 billion up from Sh. 58.3 billion.
Gross trade finance revenue grew by 90 per cent to Sh. 11 billion from Sh. 5.8 billion driven by a 106 per cent growth of trade finance-related lending and 26 per cent growth of trade finance guarantees and off-balance sheet items.
Total costs grew by 52 per cent to Sh. 128.2 billion up from Sh. 84.5 principally driven by a 139 per cent growth in loan loss provision of Sh. 32.8 billion up from Sh. 13.7 billion.
Other operating expenses and staff costs grew by 39 per cent and 28 per cent respectively, driven by high inflation and depreciation of the Kenya shilling. Return on average equity stood at 22.3 per cent against an 18 per cent cost of capital.
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At the same time, gross balance sheet grew by 26 per cent to Sh.1.821 trillion up from Sh. 1.447 trillion driven by 29 per cent growth in customer deposits to Sh. 1.358 trillion from Sh. 1.052 trillion.
Shareholders’ funds grew by 20 per cent to Sh. 218.1 billion up from Sh. 182.2 billion.
In the period under review, net loans grew by 26 per cent to Sh. 887.4 billion up from Sh. 706.6 billion while government securities holding grew by 27 per cent to Sh. 500.5 billion up from Sh. 394 billion as cash and cash equivalent grew by 25 per cent to Sh. 290.1 billion up from Sh. 232.4 billion.