Equity Bank Results 2020: Equity Group has announced the financial results for the year ended December 31 2019. The financial results show that Equity recorded a 14 per cent profit after tax growth to Ksh. 22.6 billion from Ksh. 19.8 billion in 2018. This performance was largely driven by a 23 per cent growth in loan book to Ksh. 366.4 billion from Ksh. 297.2 billion in the previous year.
The growth in loan book saw the bank’s balance sheet register a 17 per cent growth to reach Ksh. 673.7 billion up from Ksh. 573.4 billion funded by growth in customer deposits of 14 per cent, shareholders funds of 18 per cent and a 26 per cent growth of long-term borrowed funds.
“Execution of the Group’s business strategy continued to yield results as non-funded income contributed 40 per cent of the Group’s total income reflecting quality and diversification of income. Success in our regional expansion and business diversification saw subsidiaries contribution to Group profit after tax rise to 18 per cent up from 15 per cent the previous year,” Dr. James Mwangi, the managing director and chief executive officer at Equity said.
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Return on average equity (RoAE) from subsidiaries grew to 16.9 per cent up from 13.3 per cent. Subsidiaries’ assets accounted for 27 per cent of the Group’s total assets while their profit after tax contribution grew to 18 per cent of the Group’s profits up from 14 per cent in 2018.
Improved efficiencies at the subsidiaries saw their cost structure contribute to the Group improve to 35 per cent from 37 per cent in 2018.
The Group continued to maintain an agile balance sheet with a liquidity of 52.1 per cent, a loan deposit ratio of 75.9 per cent and a core capital to risk-weighted asset ratio of 19.8 per cent.
The balance sheet reflects solid diversified funding with customer deposits constituting 72 per cent of the total funding, shareholders and long-term borrowing contributing 17 per cent and 8 per cent respectively. Net loans constituted 54 per cent of the total assets while government securities and cash and cash equivalents contributed 26 per cent and 13 per cent of the total asset allocation respectively.
“Our purpose of transforming lives, giving dignity and expanding opportunities for wealth creation and our vision of championing social economic prosperity of the people of Africa is driving our business. Our purpose has become profitable,” added Dr. James Mwangi.
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The Group registered enhanced efficiency and cost optimization with cost-income ratio improving to 51 per cent from 52.4 per cent in 2018. The Group maintained its yield on interest-earning assets at 11.2 per cent despite the challenge of interest capping and the declining yield curve.
