Equity Bank has officially surpassed the Ksh 1 billion mark in pre-tax profits from its insurance business in Q3 2024, a 181% rise from Ksh 381 million in Q3 2023, just 3 years into its insurance business. This success has been attributed to increased earned premiums, effective underwriting and claims reserving, and higher earnings from investments.
While announcing the Equity bank Q3 results, Dr. James Mwangi, Managing Director and CEO of Equity Group Holdings Plc, expressed confidence in the Group’s strong liquidity position.
“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, signaled by reduction of the Central Bank Reference rates in some of the countries where we operate. With the improved liquidity, the Group continued to optimize its balance sheet, reducing leverage by Kshs.137.6 billion of expensive long-term borrowings.” Dr. Mwangi said.
Equity Bank’s profit before tax rose to Ksh 51 billion in Q3 2024, up from Ksh 45.9 billion in the same quarter of 2023, extending a five-year trend of rising profits for the bank.
Equity Bank’s customer deposits grew by 9.0%, reaching Ksh 1.3 trillion, from Ksh 1.2 trillion in Q3 2023. This increase brought the loan-to-deposit ratio to a balanced 60.7%.
Additionally, Equity’s net interest income rose by 11.0% to reach Ksh 80.6 billion, up from Ksh 72.6 recorded during the same period last year. Non-interest income also grew by 5.8%, contributing Ksh 1.2 billion, with total operating income rising by 8.7% to Ksh 141.7 billion.
The bank’s cost-to-income ratio stood at 55.1. Furthermore, Equity Bank’s profit after tax rose by an impressive 13.1% to reach Ksh 40.9 billion.
Customer loans declined by 5.4%, with the loan portfolio shrinking to Ksh 800.14 billion. Total operating expenses also saw a rise, increasing by 7.4% to Ksh 90.7 billion.
In a bid to manage risk exposure effectively, Equity Bank reduced its loan loss provisions by a notable 33.2%, bringing it down to Ksh 12.7 billion.
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Amid ongoing macroeconomic challenges, including high interest rates and fluctuating exchange rates in the markets where it operates, Equity Group Holdings Plc (EGH) regional businesses contributed 51% of profit before tax and accounted for 48% of the Group’s total assets, which reached Ksh 1.7 trillion as of September 30, 2024.
“Despite operating in a challenging environment, Equity Group remains committed to sustainable practices. Our recently unveiled Sustainability Report highlights the Group’s strategic approach to embedding sustainability. As an early adopter of the Taskforce for Nature-related Financial Disclosures (TNFD) framework in Africa, and the Africa Natural Capital Alliance (ANCA) the Group is not only focused on sustainable customer solutions but also actively supports nature restoration, having achieved the significant milestone of planting 30 million trees. Furthermore, Equity Bank continues to lead in climate finance by extending over USD 200 million in climate finance initiatives.” Dr. Mwangi added.