Equity Group released their HY’23 earnings results posting a 7.77% y/y and 7.31% y/y increase in PAT and EPS respectively to KES 26.33Bn and KES 6.75 per share respectively. The lenders bottom line growth was driven by a 16.55% y/y increase in net interest income and a 41.19% y/y increase in non-interest income and weighed down by a 37.40% y/y increase in operating expenses. Trailing ROaE and ROaA declined to 27.85% and 3.22% respectively in HY’23. NIMs remained adequate at 7.19% while the profit margin edged down y/y to 31.77%.
Loan book grew by 25.61% y/y to KES 817.19Bn faster than the 21.04% y/y growth in the customer deposits to KES 1.18Tn leading to 253bps decrease in the loan deposit ratio to 69.53% from 67.00% recorded in HY’22. On a q/q basis, Loan book concentration to corporate declined to 39.00% while allocation to SME’S as a percentage of the loan book increased to 26.00% from 25.00% in Q1’23. Loan book growth was driven by highest increase in lending from Kenya and DRC while deposit mobilization was highest in Uganda and Rwanda. In terms of value of digital loans disbursed, the mobile loan to branch loan mix was at 34:66 while the transaction count was at 87:13 signifying the higher loan tickets in the branches. We also observed the share of foreign currency loans climbing to 51.20% from 45.90% in H1’22 attributable to shilling depreciation and dollar shortage leading to difficulties in settling loans. We observed a 23.31% increase in the balance sheet size to KES 1.64Tn which we attribute to regional expansion. Allocation to government securities increased by 33.04% y/y to KES 485.64Bn, faster than the loan book growth, driven by higher yields on government securities.
