Kenya | NSE

Equity Group released their Q3'22 earnings results where PAT and EPS were above our expectations by edging up 26.62% y/y and 26.65% to KES 33.35Bn and KES 8.84 respectively. Bottom-line growth was driven by a 23.43% increase in net interest income and a 32.04% growth in non-interest income outpacing an 87.94% growth in impairment provisioning and a 31.72% growth in operating expenses. Trailing ROaE & ROaA improved to 29.98% and 3.73% respectively in 3Q22. Factoring in the growth from previous quarters, we foresee the lender closing the year with a PAT of between KES 45.00 -48.00 Bn.

I & M Holdings released their 3Q22 earnings results where PAT and EPS were above our expectations by edging up 25.00% y/y and 25.23% respectively to KES 6.18Bn and KES 4.12 driven by a 15.56% increase in net interest income and a 43.00% growth in non-interest income. Trailing ROaE improved 22bps to 13.91% while NIMs remained adequate at 6.46%.

Coop Bank released their 3Q22 earnings results where PAT and EPS were above our expectations by edging up 47.05% and 46.95% y/y respectively driven by a 11.75% increase in net interest income and a 28.25% growth in noninterest income. Trailing Return on Equity improved to 21.02% while NIMs remained strong at 8.48%.

PAT and EPS above our expectations by edging higher by 20.99% and 21.70 y/ y respectively as driven by a 9.14% increase in net interest income and a 30.18% growth in non interest income.

Safaricom PLC 1HY’23 PAT declined 18.40% as driven by a 32.20% increase in operating expenses as a result of the commencement of full commercial operations in Ethiopia.Revenues increased 4.82% y/y to 153.45 Bn which included KES 98.30 Mn in revenue from its Ethiopian subsidiary. However, the slowdown in MPESA revenue was observed attributable to lower usage before, during, and after the election period and a decline in voice revenue due to the revised Mobile Termination Rates from KES 0.99 to KES 0.58. Earnings per Share (EPS) declined 8.70% to 0.84 from 0.92 in 1H22. Due to the continuous capital injection to Safaricom Ethiopia, the board did not recommend an interim dividend for the period.

NSE Market Capitalization declined a further 6.58% in September driven by foreign investor sell-offs despite the peaceful conclusion of the August elections. Other than the elections factors, foreign investors’ exits have contributed to an NSE market decline fuelled by rising yields in developed markets following benchmark rate hikes with the US Fed hiking the benchmark rate by another 75bps in the September meeting.