Equity Group Announces Profits After Tax For F/Y 2024

Equity Group Holdings Plc has reported a Profit After Tax of Sh48.8 billion for the financial year ending December 31, 2024, marking a 12percent increase from the previous year’s earnings. 

The bank proposed dividends of Sh4.25 percent per share which is a payout ratio of 34.5 percent.

Equity Group attributes the growth to several strategic initiatives undertaken by the bank. A significant factor was the 21 percent rise in revenue, primarily driven by increased economic activities in the commercial and industrial sectors. The bank’s focus on digitization and automation has also played a crucial role, enhancing customer convenience and operational efficiency. By enabling customers to self-serve using their devices and third-party infrastructure, Equity has shifted its cost structure from fixed to variable costs, leading to improved profitability. 

The bank also reported a decline in finance costs, owing to the strengthening of the Kenyan shilling against major global currencies. This favorable exchange rate movement reduced the cost of servicing foreign-denominated obligations, positively impacting the bottom line. 

Equity Group has strategically allocated 40 percent of its Sh779 billion loan book to corporates and large enterprises, 26 percent to micro, small, and medium enterprises (MSMEs), 28 percent to retail and consumer segments, and 6 percent to public service institutions. This diversification not only mitigates credit risk but also fosters economic development across different segments. 

Furthermore, Equity’s regional expansion strategy has borne fruit, with subsidiaries outside Kenya contributing 63 percent of the Sh20.4 billion profit before tax. These subsidiaries achieved a return on average equity of 27.6 percent. 

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The bank’s emphasis on non-funded income streams has also been pivotal. Non-funded income accounted for 43.9 percent of the total income of Sh49.6 billion, amounting to Sh21.8 billion. Treasury operations contributed 30 percent of the gross income, highlighting the bank’s effective diversification strategies. 

Equity’s life insurance subsidiary demonstrated sharp growth, with profit after tax surging by 106 percent to Sh321 million. Total insurance assets expanded by 288 percent to Sh20.8 billion.