EQTY | Equity Group FY22 Earnings Note

    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.


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    AIB-AXYS Africa Ltd is the fusion of two established companies; AIB Capital Limited and Apex Africa Capital Limited, both with over 25 years of experience in the Securities market. With the solid reputation and experience of the professional teams, we leverage talent and networks to better service businesses and investors looking to capitalize on the African growth story, and its vibrant financial sector.
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