Subscribe Now

* You will receive the latest news and updates on your favorite celebrities!

Trending News

Global News Update

Equity Bank Kenya Profits Drops: Tanzania Subsidiaries Record Over 100% Growth in Earning

Equity Bank Kenya Profits Drops: Tanzania Subsidiaries Record Over 100% Growth in Earning 


Equity Group released the third quarter financial results in November 20, and for the first time in seven years, Equity Bank Kenya witnessed a 20% decline in its profit after tax, amounting to KSh19.3 billion. The bank’s third-quarter income statement revealed a growth in net profit, rising from KSh 34.4 billion recorded last year, supported by enhanced revenues across its subsidiaries in the Democratic Republic of Congo (DRC) and Tanzania.

Equity Group Chief Executive Officer James Mwangi noted that despite encountering inflation and currency headwinds in Kenya, the overall performance of the organization remained robust, with Equity Bank Kenya achieving a 13% growth in revenue to KSh 68.4 billion, and subsidiaries in the Democratic Republic of Congo, Uganda, and Rwanda demonstrating even more robust revenue performance.

The CEO of Equity Group, James Mwangi attributed the drop in profits in Kenya to the global connections in Kenya, which have led to the depreciation of the Kenyan Shilling against the dollar. “It is not the entire operating region that is being affected. What we may be losing in Kenya, because it is the most globally interconnected where the Kenya shilling has deprecated the most, that is being compensated by the subsidiaries where they are able to contribute 50pc of the profits,” said Mwangi.

Equity BCDC, the subsidiary in the Democratic Republic of Congo, recorded an impressive 142% increase in net profit, reaching KSh11.4 billion, while the Tanzania subsidiary achieved a noteworthy 136% growth in net earnings. During the period under review, Equity Bank Rwanda saw a 38% increase in revenue, reaching KSh 6.8 billion, while Equity Bank Tanzania and Equity Bank South Sudan reported respective revenue growths of 10% and 13%, amounting to KSh 3.8 billion and KSh 2.9 billion.

Overall, the lender’s income experienced a robust 28% growth, rising from KSh 100.9 billion in the same quarter last year to KSh 129.1 billion. The World Bank has reiterated its commitment to supporting Kenya in its journey to become an upper-middle-income country by 2030 with a total financial package of $12 billion (KSh 1.83 trillion) over the next three years. The World Bank, a steadfast ally in Kenya’s pursuit of economic advancement, has announced a groundbreaking financial support package amounting to KSh 1.83 trillion over the next three fiscal years (FY24–FY26), which underscores the World Bank’s unwavering commitment to assisting Kenya in achieving its ambition of becoming an upper-middle-income country by 2030.

According to a statement distributed by APO Group on behalf of The World Bank Group, Kenya already benefits significantly from the World Bank’s support, currently accessing approximately $2 billion (KSh 304.9 billion) annually in concessional financing.

Concessional finance refers to financing offered by prominent financial institutions, including development banks and multilateral funds, at rates below the market rate, aiming to expedite development objectives in developing countries.

The International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD) have collectively committed $8.3 billion, with $4.4 billion (KSh 670.78 billion) ready for disbursement. Additionally, the International Finance Corporation (IFC) boasts an investment portfolio of $1.2 billion (KSh 182.9 billion), while the Multilateral Investment Guarantee Agency (MIGA) actively engages with $424 million (KSh 64.6 billion) in guarantees spanning the energy, transport, financial, fintech, and tourism sectors.

The financial aid from the World Bank over the next three years is projected to reach an estimated $4.5 billion (KSh 686 billion), inclusive of fast-disbursing operations, with $3 billion earmarked to come from IDA, while IBRD is set to contribute $1.5 billion. Complementing these efforts, IFC plans to inject around $1 billion (KSh 152.45 billion) in investments, while MIGA guarantees could potentially reach $500 million (KSh 76.2 billion). However, the actualization of this comprehensive financial package is contingent upon the approval of new operations by the World Bank Executive Directors and consideration of factors that may impact the bank’s lending capacity.

President William Ruto’s administration has slashed several subsidy programmes as part of loan conditions from the International Monetary Fund (IMF). IMF set certain conditions for the government to meet before the international lender could approve loan facilities for Kenya.


Related posts