Equity shareholders to get Sh15bn as profit rises 15pc 

Equity Group

From left: Equity Group Executive Director Mary Wamae, Board Chairman Isaac Macharia, Managing Director and CEO James Mwangi and Chief Operating Officer Samuel Kirubi during the investor briefing event on March 28, 2023. 

Photo credit: Pool

Equity Group shareholders will get a dividend of Sh4 per share, totalling a record Sh15.1 billion after the bank recorded a 15 per cent increase in net profit for the financial year to December 2022.

The dividend payout is an increase from the Sh11.3 billion that the lender paid out to its shareholders in the year ended December 2021 when it paid Sh3 per share. 

“The Board of Directors has recommended a dividend of Sh4 for each ordinary share on the issued and paid-up share capital of the company for the financial year ended 31 December 2022. Subject to shareholders’ approval, the dividend will be payable on or before June 30, 2023, to the members of the company on the share register of the company on the closure date of May 19, 2023,” said Equity.

The Nairobi Securities Exchange-listed bank earned Sh46.1 billion in profit after tax—also a record high—which is a 15 per cent increase from the net profit of Sh40.1 billion it earned in the previous year.

The earnings were driven by a 28 per cent growth in total income, which hit Sh144.3 billion including Sh58.3 billion in non-funded income and Sh86 billion in net interest income which grew 33 per cent and 25 per cent, respectively.

Increase in costs

Equity, however, incurred a 39 per cent increase in costs, which hit Sh84.5 billion after the lender raised loan loss provisioning by 180 per cent to Sh13.7 billion from Sh4.9 billion in the previous year, while staff costs grew by 30 per cent to Sh24.8 billion on an increased hiring.

“The Group’s 2022 results reflect the resilience that the business has developed due to deliberate and intentional leadership and management decisions through the interest capping period and Covid-19 pandemic environment, strategically positioning the business to navigate the evolving macroeconomic headwinds and turbulence in the financial and economic sectors,” said Equity Group Chief Executive James Mwangi.

The dominance of Equity’s Kenyan unit in the Group’s earnings has continued to fall owing to the bank’s increased regional penetration, with Kenya contributing to 73 per cent (Sh33.4 billion) of the net profit while the other markets earned a total of Sh14.7 billion.

Of its regional subsidiaries, Equity’s Democratic Republic of Congo unit was the most profitable turning a profit after tax of Sh5.8 billion, the Rwanda unit earned Sh2.8 billion, the South Sudan subsidiary Sh2.3 billion while the Uganda unit earned Sh2 billion.

Further, some 79.2 per cent of Equity’s transactions were through mobile and internet banking, underlining the increasing shift to digital transactions despite dropping from a share of 86.7 per cent in 2021. Just 1.4 per cent of transactions were carried out at the bank’s branches down from 1.5 per cent in the previous year, 1.5 per cent were ATM transactions, 6.2 per cent were handled by agents and 11.7 per cent by merchants and pay with Equity.

Juicy dividends

Equity’s earnings underline the good year that banks enjoyed in 2022, reaping a record Sh244.1 billion in profit before tax, setting the stage for payment of juicy dividends for shareholders.

Lending to the government through Treasury bills and bonds by banks grew by Sh196 billion in 2022, while loans extended to the private sector increased by Sh380 billion during the same period, according to data from the Central Bank of Kenya (CBK).

The 2022 performance is a 25.3 per cent increase from the Sh194.8 billion in profit before tax that the lenders earned in 2021 as earnings from interest on loans and government securities as well as non-funded income grew sharply.

Further, gross non-performing loans rose by 14.2 per cent in 2022, rising from Sh426.8 billion in December 2021 to Sh487.7 billion in December 2022, according to the CBK data.


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