Equity Group released their FY’22 earnings results posting a 14.64% & 15.35% climb in EPS & PAT respectively to KES 11.90/share and KES 46.10Bn respectively. Bottomline growth was driven by a 24.98% increase in net interest income and a 34.46% growth in non-interest income. Trailing ROaE & ROaA improved to 29.05% & 3.35% respectively in FY’22. NIMs remained adequate at 7.18% while the profit margin edged down to 31.59%. Better than our expectation of KES3.00 DPS, the board of directors recommended a final dividend of KES 4.00 representing a 33.33% increase from KES 3.00 paid out in FY’21.

Loan book grew 20.21% y/y to KES 706.59Bn faster than the 9.72% y/y growth in the customer deposits to KES 1.05Tn leading to a 586bps decline in the loan deposit ratio to 67.16% from 61.29% recorded in FY’21. In terms of value digital loans disbursed , the mobile loan to branch loan mix was at 19:81 while the transaction count was at 83:17 signifying the higher loan tickets in the branches. Loan book concentration shifted to corporate with 41.00% of the loan book compared to 37.00% in FY’21 while allocation to SMEs as a percentage of total loan book declined to 25.00% from 28.00% in FY’21. We also observed the share of foreign currency loans jumping to 48.50% from 44.10% in FY’21 attributable to shilling depreciation and dollar shortage leading to difficulties in settling loans. We observed a 10.89% jump in the balance sheet size to KES 1.45Tn, which we believe has opened a race to KES 2.00Tn with close competitors KCB who have already crossed the KES 1.50Tn mark. We foresee majority of this growth being inorganic through regional expansion.