Equity Group Holdings PLC has announced a groundbreaking dividend payout of KES 15.1 billion for the fiscal year 2023. Under the leadership of Dr. James Mwangi, Group Managing Director and CEO, this declaration marks a consecutive year of record dividend payments. The payout, pegged at KES 4 per share, signifies a 36% distribution of the Group’s profit after tax, which stood at KES 43.7 billion. This represents an earnings per share of KES 11.1 and an impressive dividend yield of 11.9% against the year-end closing share price of KES 33.65, translating to an 800% yield on the par value.
Financial Performance Highlights
Equity Group’s financial milestones in 2023 were notable across various dimensions:
- The net interest income saw a robust 21% increase to KES 104.2 billion from KES 86 billion.
- Non-funded income grew by 30% to KES 75.9 billion from KES 58.3 billion, showcasing a diversified income strategy.
- A standout performance was observed in gross trade finance revenue, which soared by 90% to KES 11 billion, underpinned by a 106% increase in trade finance-related lending and a 26% expansion in trade finance guarantees and off-balance sheet items.
- Total costs escalated by 52% to KES 128.2 billion, primarily due to a 139% rise in loan loss provisions to KES 32.8 billion, aimed at bolstering asset quality.
Despite these increases in revenue and provisions for asset quality, the Group’s Profit After Tax dipped slightly by 5% to KES 43.7 billion, attributed to a 53% surge in interest expense, which outpaced the 30% growth in interest income.
Balance Sheet Growth and Customer Expansion
Equity Group demonstrated significant balance sheet growth and customer expansion:
- The gross balance sheet expanded by 26% to KES 1.821 trillion.
- Customer deposits surged by 29% to KES 1.358 trillion.
- Net loans grew by 26% to KES 887.4 billion, and government securities holdings increased by 27% to KES 500.5 billion.
- Over seven years, amidst economic turbulence, customer numbers doubled to 19.6 million from 10.4 million, with deposits growing to KES 1.358 trillion from KES 303.2 billion, and the loan book expanding to KES 887.4 billion from KES 269.9 billion.
Strategic Acquisitions and Market Positioning
In a strategic move to cement its presence in the fast-growing Rwandan economy, Equity Group completed the acquisition of Cogebanque, resulting in a combined entity with assets totalling KES 127.7 billion and an 18% market share. This positions Equity as the second-largest bank in Rwanda.
Equity Group’s strategic evolution from a core banking provider to a diversified financial services and technology platform is evident in its financial services diversification and adoption of digital solutions. Notably:
- Equity Group Insurance, operating for 21 months, amassed 1,274,980 unique customers and closed the year with KES 19.2 billion in total assets.
- Digital loan repayments for MSME and retail segments are impressively high, showcasing the Group’s effective digitisation strategy.
Equity Group’s commitment to social impact and sustainability is reflected in its wide array of initiatives aimed at environmental conservation, financial education, healthcare, and renewable energy promotion. For instance, over 2.4 million youth and women have been trained in financial education, and more than 25.2 million trees have been planted.
Equity Group is poised for continued growth, leveraging its strategic positioning, diversified business model, and strong risk management capabilities. The Group’s focus on customer-centric innovations, regional expansion, and commitment to social and environmental impact positions it uniquely to capitalise on the opportunities in the fast-growing Eastern African region.
