Equity Group (EQTY) Q2 2024 earnings summary

Executive summary

• Profit after tax rose 12% year-over-year to Kshs 29.6 billion for H1 2024, with total assets up 6% to Kshs 1.75 trillion and deposits up 11% to Kshs 1.3 trillion.

• Regional subsidiaries contributed over half of profit before tax and 49.7% of total assets, reflecting successful diversification.

• Shareholders' funds increased 13% to Kshs 220 billion, supporting new insurance ventures and future acquisitions.

• The group received a general insurance license, expanding its product offering and reinforcing its market leadership.

• Digital transformation continues, with 84% of transactions via digital channels.

Financial highlights

• Interest income grew 22% year-over-year to Kshs 84.8 billion, while non-funded income rose 14% to Kshs 40.7 billion.

• Total income increased 16% to Kshs 95.1 billion, and net interest income was up 17% to Kshs 54.4 billion.

• Loan loss provisions rose 35% to Kshs 8.5 billion, maintaining NPL coverage at 70% and an NPL ratio of 12.9%, below the industry average.

• Operating expenses increased 27% due to infrastructure investments and inflation.

• Earnings per share rose 12% to Kshs 7.6.

Outlook and guidance

• H1 2024 actuals largely met or exceeded guidance: deposit growth at 11%, ROE at 26.7%, and ROA at 3.4%.

• Loan growth was below guidance at -3%, while cost of risk slightly exceeded guidance at 2.6%.

• Subsidiaries contributed 56% of PBT, surpassing the 45–50% target.

• Strong liquidity and capital buffers position the Group to support customers as economic conditions improve.

• Optimism driven by regulatory rate reductions and improved liquidity, with plans to invest in new subsidiaries.