Equity Group has recorded a profit decline of 17 per cent in nine months ending on September 30 with its earnings reducing by Sh2.5 billion from Sh17.3 billion.
The bank attributed the decline mainly to increase in loan defaulters with its loan-loss costs growing eight-fold to Sh14.8 billion from Sh1.9 billion last year.
The increased provisions by the bank have pushed up the lender’s total operational costs from Sh40.5 billion last year to Sh58.1 billion.
Relatedly, Equity’s stock of bad loans represented in the gross non-performing loans portfolio grew by 170 per cent to Sh51.8 billion from last year.
The Non-Performing Loan growth has been attributed to rising risk by borrowers due to the Covid-19 pandemic which has adversely affected the economy.
However, Equity Group’s total operating income grew by 17 per cent to Sh64.1 billion from Sh54.8 billion last year.
The bank’s assets also expanded to Sh933.9 billion as loans and advances to its clients jumped to Sh453.9 billion representing a 17 percent growth.
Equity’s client deposits grew to Sh691 billion from Sh478.1 billion last year, with its earnings per share (EPS) falling to Sh3.93 from Sh4.59 due to the profit decline.