Kampala, Uganda I HABARI DAILY I Equity Group Holdings has showcased robust financial performance for the year 2023, declaring a hefty dividend to its shareholders.
Under the stewardship of Dr. James Mwangi, Group Managing Director and CEO, the body reported substantial year-on-year profits, marking a testament to its resilience and strategic acumen.
During the release of the 2023 full-year financial results, Dr. Mwangi announced a record dividend proposal of Kshs. 15.1 billion, reflecting the Group’s steadfast commitment to delivering value to its shareholders.
This proposed dividend of Kshs. 4 per share signifies a remarkable 36% payout of the Kshs. 43.7 billion Profit After Tax or Kshs. 11.1 earnings per share, with a dividend yield of 11.9%.
The financial report highlighted impressive growth across various metrics, with net interest income surging by 21% to Kshs. 104.2 billion, and non-funded income experiencing a substantial 30% increase to Kshs. 75.9 billion.
Driven by a 90% growth in gross trade finance revenue to Kshs. 11 billion, the Group demonstrated its resilience and adaptability amidst challenging market conditions.
Despite a 52% increase in total costs to Kshs. 128.2 billion, primarily attributed to a 139% surge in loan loss provision to bolster asset quality buffers, Equity Group maintained a strong financial position. The gross balance sheet expanded by 26% to Kshs. 1.821 trillion, fueled by a 29% growth in customer deposits to Kshs. 1.358 trillion.
In the face of market uncertainties, Equity Group successfully expanded its customer base to 19.6 million, showcasing its unwavering commitment to financial inclusion and customer-centric services. The Group’s loan book grew to Kshs. 887.4 billion, underscoring its pivotal role in driving economic growth and development across the regions it operates in.
Dr. Mwangi emphasized the Group’s proactive risk management approach, with a PAR (Portfolio at Risk) of 11.7%, a notable improvement from previous quarters. He highlighted the Board’s decision to increase loan loss provision by 139%, demonstrating a prudent strategy to mitigate risks and safeguard future performance.
Equity Group has solidified its position as a systemic financial services provider in the region, ranking among the top players in Kenya, Uganda, DR Congo, Rwanda, and South Sudan. With its deposit and loan distribution spanning multiple markets, the Group continues to drive inclusive growth and prosperity across the region.
As Equity Group charts a course forward amidst evolving market dynamics, its unwavering commitment to innovation, customer-centricity, and prudent risk management sets a benchmark for sustainable growth and excellence in the financial sector.
Owing to its annual performance, Equity emerges as a regional financial services leader with 50% of assets, 51% of revenue and 56% of profit before tax being contributed by regional banking subsidiaries.
Its insurance business grew total assets four-fold to Kshs.19.2b from Kshs4.9b and registers 39% growth in profit before tax of 934 million up from Kshs670m as return on average equity picks up to 70.4% on 5.5 million new policies and 1,275,000 unique customers.
The Group’s technology platform enabled 6.2 million digital loans with disbursement value of Kshs284.6b.
Additionally, Equity Group Foundation derisked 517,247 MSME entrepreneurs through training and capacitating them with Kshs.275.3b loans to create 1.3 million jobs under the Young Africa Works Program.
To cushion civil servants, teachers and other salaried workers, Equity maintained interest rate at 13% for loans disbursed prior to the implementation of risk-based lending rates currently at 20%- 24%.
