Equity Group (EQTY) Q4 2024 earnings summary

Executive summary

• Profit before tax rose 17% to KES 60.7B and profit after tax increased 12% to KES 48.8B, driven by regional expansion and diversified growth.

• Regional subsidiaries contributed 49% of assets and 54%–56% of profit before tax, with DRC, Rwanda, and other markets outpacing the parent in growth.

• Dividend per share increased to KES 4.25, with a payout ratio of 34.5% and total payout of KES 16B.

• Total assets stood at KES 1.80Tn, a slight decrease of 1% year-over-year, while customer deposits rose 3% to KES 1.40Tn.

• Strategic transformation focused on governance, people, IT systems, and resilience amid currency volatility and geopolitical shocks.

Financial highlights

• Total income grew 6% to KES 193.8B, with net interest income up 4% and non-funded income up 8%.

• Cost to income ratio increased to 58.2%, while net interest margin declined to 7.1%.

• Return on equity was 21.5% and return on assets 2.8%, both above industry averages.

• NPL ratio at 12.2%, with 71% coverage and loan loss provisions of KES 20.2B.

• Dividend yield at 8.5%–8.9%, with a payout ratio of 34.5%.

Outlook and guidance

• 2025 guidance targets 7.5%–15% growth in loans and deposits, net interest margin of 7.3%–7.8%, and cost-income ratio below 52%.

• Return on equity guidance set at 25%–30%, with NPL ratio expected at 8%–10%.

• Focus on digital transformation, product innovation, and regional expansion for sustainable growth.

• Confident in double-digit insurance contribution to group profit and continued regional expansion.

• Expecting normalization of interest expense and improved performance as shocks subside.