Diversification strategy pays off as Equity Group Holdings posts a 13% growth in PBT and welcomes new Strategic Investor
29/04/2015…Regional financial services provider, Equity Group Holdings, has recorded a 13% increase in Profit before Tax in the first quarter of 2015.
The Group’s pre-tax profits for the period increased by 13% to KShs 6.1 billion up from KShs 5.4 billion posted over the same period last year. The performance is largely attributed to growth in intermediation business and successful outcomes from the revenue diversification initiatives under implementation.
Speaking during an investors briefing session at the Group’s Equity Center headquarters in Nairobi, Equity Group Holdings CEO & Managing Director Dr. James Mwangi expressed optimism that the Group’s performance will remain positive over the year.
”The Group’s sustained investments in mobile and agency banking, payment systems and money transfer as well as diaspora remittances and operating expenses optimization initiatives will continue to contribute to the positive growth trajectory. We are highly optimistic that the growth momentum will be maintained throughout the year with a number of new products and services set to be launched in the coming months,” said Dr Mwangi.
Other areas of continuing focus will be the SME sector, optimization of delivery channels, merchant acquiring business and payment processing, diaspora banking and remittance processing, regional expansion and further diversification into other financial services products.
Customer deposits maintained a positive trajectory and grew by 35% to KShs 278 billion up from KShs 206 billion in March last year.
The Group’s total operating income grew by 19% to KShs 13.2 billion up from KShs 11.1 billion registered in the same period last year. The increase in income was buoyed by significant successes in driving non- funded revenues which grew by 36 % to reach 42 % of total operating income. Total expenses grew by 24% to KShs. 7.1 billion on the back of investments made in an expanding the IT capacity in 2014. The benefits from the investments are expected to accrue from the strategic initiatives under implementation.
Driven by a rich portfolio of diversified investments, Equity Group Holding’s total assets grew to KShs 372.5 billion up from KShs 295.3 billion representing a 26% growth year on year. Net loans recorded a 25% growth from KShs. 179.3 billion in March 2014 to KShs. 224.8 billion in March 2015 while maintaining high quality of the loan book.
The Group sustained its track record of value creation for its investors and efficiency in utilization of its assets registering Returns on Equity (ROE) and Return on Assets (ROA) of 27.6% and 4.8% respectively.
We are glad that our customers and the respective national economies continue to show resilience and project a positive outlook.” Dr Mwangi said.
The Group’s latest innovation Equitel (the fastest growing MVNO), maintained an impressive trajectory managing an 81% growth to close the trading period with over 650,000 subscribers.
Dr Mwangi also announced the completion of the purchase of 12.223% interest in Equity Group Holdings Limited representing half of Helios’s interest in Equity Group. “Equity is delighted to welcome Norfund and Norfinance into the anchor shareholding of the Group. This development further strengthens and diversifies Equity Group’s capital base and the Bank is confident that the combination of Norfund’s depth of expertise and experience in the financial services sector as well as its demonstrated long term commitment in promoting financial inclusion in emerging and developing markets will be invaluable contributors to Equity’s growth in the years ahead and in particular the successful execution of the new phase of the Group’s strategic development - Equity 3.0”.
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