Equity Group Holdings Plc (EGH) has announced a commendable half-year profit after tax of Sh29.6 billion, marking a 12 per cent increase compared to the same period last year.

This robust performance is particularly noteworthy given the challenging economic landscape characterized by elevated interest rates and volatile exchange rates.

The Group's financial health remains strong, with total assets expanding by 6 per cent to reach Sh1.75 trillion.

A key driver of this growth is the deposit franchise, which surged by 11 per cent year-on-year to Sh1.3 trillion, underpinned by a growing customer base now standing at 20.7 million.

This growth has translated into a substantial 55 per cent increase in cash and cash equivalents to Sh341 billion, while investment securities have risen to Sh459 billion. Consequently, the Group’s liquidity position is a robust 57 per cent.

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Commenting on the results, Dr. James Mwangi, Equity Group Holdings Managing Director and Chief Executive Officer, expressed optimism about the Group's ability to support customers during the ongoing economic challenges.

"We are optimistic that the strong liquidity of the Group has positioned us to effectively support our customers as the economy starts showing signs of improvement in the key markets we operate in, signalled by some of the regulators' reduction of the Central Bank Reference rates," Mwangi stated.

"With the improved liquidity, the Group continued to optimize its balance sheet reducing leverage by Sh75 billion of expensive borrowings."

Shareholders' funds have also experienced growth, rising by 13 per cent to Sh220 billion.

This strengthened capital base positions the Group for strategic investments, including new insurance subsidiaries and acquisitions, as it actively participates in the private sector-led Africa Resilience and Recovery Plan (ARRP).

The Group’s top-line performance is equally impressive. Interest income surged by 22 per cent to Sh84.8 billion, although increased interest expenses, up 30 per cent to Sh30.4 billion, tempered the overall growth.

Non-funded income contributed significantly, growing by Sh5 billion, resulting in a total income increase of 16 per cent to Sh95.1 billion.

Equity Group’s regional diversification strategy continues to yield positive results.

While Kenya remains a significant market, contributing 43 per cent of revenue (down from 46 per cent in the previous period), the growing contributions from subsidiaries in the Democratic Republic of Congo and Rwanda are particularly noteworthy.

These subsidiaries now account for 47 per cent of total loans and contribute 51 per cent of profit after tax.

The Group's prudent risk management approach is evident in the 35 per cent increase in loan loss provisions to Sh8.5 billion.

However, the Non-Performing Loans (NPL) coverage ratio remains at a healthy 70 per cent, with an NPL ratio of 12.9 per cent.

"We are proud that the Group has sufficient cushion on its key balance sheet buffers being liquidity, capital and NPL coverage while at the same time it continues to report above industry profitability metrices with return of average equity of 26.7 per cent and return on average assets of 3.4 per cent," Mwangi said.

Equity Group’s forward-looking approach and robust financial position leave it well-placed to continue driving sustainable growth, even in the face of global economic challenges.