Equity Group Holdings has posted an 8 per cent increase in its half-year profit after tax to Sh26.3 billion from the Sh24.4 billion recorded during a similar period last year.

The Group's also experienced a growth in half-year profit before tax of 14 per cent to Sh35.2 billion during the first six months of 2023.

Equity revealed that its subsidiaries in Democratic Republic of Congo, Tanzania, Uganda, South Sudan and Rwanda contributed 46 per cent of total assets and 45 per cent of pretax profit.

“Our strategic pursuit has resiliently positioned us to weather the macro-economic headwinds and turbulence,” said Equity Group MD and CEO Dr James Mwangi.

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He added, “Regional geographical expansion and business diversification has seen reliance on contribution of the Kenyan banking subsidiary reduced with other subsidiaries contributing 46 per cent total assets and 45 per cent of Profit Before Tax, driven primarily by insurance and the DRC business.”

The lender’s net loans increased by 26 per cent to Sh817.2 billion during the first six months of 2023 in review as the net interest income increased by 17 per cent to Sh46.4 billion.

Dr Mwangi indicated that the Group’s assets grew by 23 per cent to Sh645 trillion, while the net loans grew by 26 per cent to Sh817 billion and a return on equity growth of 7 per cent.

“The drive to non-funded income growth registered good success with total income growing at 24 per cent driven by a 42 per cent growth of non-funded income and 17 per cent growth of net interest income,” the MD said.

He added: “Gross trade finance revenue grew by 117 per cent with trade finance related lending growing by 46 per cent, FX total income grew by 68 per cent and diaspora flows grew by 146 per cent to account for 12 per cent of all client FX volumes.”

The Equity boss said the Group’s total assets increased by 23 per cent to Sh1.6 trillion, while its loan-loss provisions minus recoveries increased by 89 per cent to Sh6.3 billion.

Equity says it realized the growth despite a tough global macro environment characterized by high inflation, high interest rates, unstable exchange rates and devaluation of currencies of emerging economies.

Equity registered a 23 per cent funding growth driven by 21 per cent customer deposits rise and 29 per cent growth in shareholders’ funds due to recovery of mark-to-market losses on Eurobonds.

But the lender raised its loan loss provisions from Sh3.3 billion to Sh6.3 billion as it expanded to different markets and gets credit risk guarantees from development finance institutions.

Its loan book grew by 26 per cent to Sh817.2 billion, an increase from Sh650.6 billion posted during the previous period.

“We are confident Equity Group is strategically positioned as a regional systemic bank among the top 3 in 5 of its 6 operating countries to support further integration and increased cross border trade under the African Continental Free Trade Area while supporting the region to remain the fastest growing common market in the world to offer opportunity for long term sustained value creation,” stated Dr Mwangi.