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Equity Bank Rwanda, Tanzania, Uganda, and DRC all recorded impressive growth in returns with market almost doubling
Nairobi, Kenya | THE INDEPENDENT | Equity Group Holdings Plc has reported a robust 17% increase in net profit to Kshs 48.8 billion for 2024, as the Nairobi-based regional lender capitalised on a diversified business strategy and its ongoing expansion across Africa. The group’s profit before tax (PBT) also grew by 17%, totalling Kshs 60.7 billion, bolstered by an 11% rise in earnings per share to Kshs 12.3, despite a challenging economic backdrop.
James Mwangi, the Group’s Chief Executive Officer, credited the bank’s strong performance to its financial resilience.
“We are proud of the resilience demonstrated by the Group amidst a challenging global economic landscape,” he said on March 27 in Nairobi. “Our financial strength gives us the flexibility to seize opportunities as the regional economy presents diversified levers for growth.”
Regional expansion drives growth
Equity’s strong results were primarily driven by significant regional expansion. The lender’s total deposits increased to Kshs 1.4 trillion, reflecting growth in its customer base, which now exceeds 21.6 million.
The group also reported a 19% increase in cash and cash equivalents, which rose to Kshs 345 billion. Investment securities grew to Kshs 512 billion, and the group’s liquidity ratio stood at 57%, underlining its capacity to navigate potential shocks and support its expansion plans under the Africa Recovery and Resilience Plan (ARRP), which aims to empower businesses and households across the continent.
The group’s regional subsidiaries played a key role in driving growth. Equity’s operations outside Kenya contributed 49% of total assets, 48% of total loans, and 54% of PBT. Equity Bank Rwanda posted a 36% year-on-year revenue increase, Tanzania saw growth of 20%, and the Democratic Republic of Congo (DRC) posted a 9% rise. Net profit growth in these markets was also impressive, with Equity Bank Rwanda, Tanzania, Uganda, and DRC increasing their net profit by 30%, 107%, 186%, and 29%, respectively.
Equity Bank Kenya, the group’s largest subsidiary, accounted for 46% of total revenue. The bank has made strategic moves to support credit growth, including reducing its base lending rate three times in the past six months to foster lending amid signs of a regional economic recovery.
Risk management
Despite the positive financial results, Equity Group exercised caution in light of global uncertainties. The group set aside Kshs 20.2 billion in loan loss provisions, reflecting a conservative stance given the current macroeconomic and geopolitical risks. Equity’s non-performing loan (NPL) ratio stood at 12.2%, significantly lower than the industry average of 16.4%, with NPL coverage at 71%.
This prudent approach to risk management has helped to maintain stability in the face of an unpredictable economic environment.
Growth in non-banking services
Equity Group’s diversified business model extended beyond traditional banking services. The group’s insurance arm delivered strong results, with pre-tax profit rising 58% to Kshs 1.5 billion. Since launching in 2022, the insurance business has issued over 14 million policies. The group’s acquisition of a general insurance license further complemented its life insurance offering, enabling it to deliver a full range of financial protection products.
The lender has also expanded its digital banking operations. Digital transactions now account for 86% of total banking activities, with Equity Mobile, the group’s mobile banking platform, processing Kshs 3.17 trillion in transactions – a 67% year-on-year increase. Equity Online (EazzyBiz), the group’s business banking platform, also saw a 21% rise in transactions to Kshs 3.84 trillion.
Outlook for 2025 and beyond
Looking ahead, Mwangi said he remains optimistic about the group’s future prospects. “Our focus on financial inclusion, regional expansion, and sustainable growth will enable us to continue being a catalyst for economic empowerment and resilience across Africa,” he said. “As we move forward, we remain optimistic about the future.”
