Equity Group posts Ksh 16B Q1 profit, driven by cost control, strategic lending shifts, and regional growth across East Africa.
Equity Group Holdings delivered a strong comeback in the first quarter of 2024, posting a 25% rise in profit after tax to Kshs 16 billion (US$123.85 million), compared to the same period last year. This turnaround comes after a 5% dip in full-year earnings for 2023, underscoring the bank’s strategic agility and sound leadership.
The Group’s performance rebound was driven by strategic financial decisions. Equity focused on deposit growth—up 11%—while cutting back on expensive placements. It also retired high-cost dollar-denominated loans leading to a 21% drop in long-term borrowed funds, significantly improving cost efficiency.
Equity enhanced its credit risk management to handle the tough economic environment. While the loan book grew modestly by 3% year-on-year, the bank shifted lending more toward government securities, which now make up 21% of its portfolio. This move helped reduce the cost of credit risk to 2.9%, down from 4.4% at the end of 2023.
The Group made significant strides in cost control. While total costs rose 28% in Q1 2024, that’s a marked slowdown from the 52% spike recorded a year earlier. As a result, the cost-to-income ratio improved to 47.1%, from 52.3% in December 2023.
Equity maintained a healthy 52.1% liquidity ratio, supported by a balance sheet of Kshs 1.69 trillion (US$13.08 billion). With over 20 million deposit customers and multiple funding sources, its liability franchise remains one of the strongest in the region.
Looking ahead, Equity Group is well-placed to navigate economic uncertainty. Its focus remains on digital innovation, customer experience, and expanding non-funded income streams. Its growing regional footprint across East Africa gives it a strategic edge in tapping emerging opportunities.
Conclusion
Equity Group’s strong Q1 2024 performance—driven by better cost control, smarter lending, and risk-conscious strategy—demonstrates its resilience and readiness for growth. With robust governance, a diversified business model, and a forward-looking strategy, the Group is poised to deliver long-term value in a fast-changing financial landscape.
Keywords:
Equity Group Q1 2024 Profit Growth, Strategic Financial Optimization, Loan Portfolio and Risk Management, Operational Efficiency and Cost Reduction, Future Outlook and Market Positioning in East Africa