Equity Group’s net profit for nine months through September climbed 26.61 per cent to Sh33.35 billion, helped by higher income from lending and transactions.
The bank had made a net income of Sh26.3 billion a year earlier. Its interest earnings rose 23.43 per cent to Sh59.84 billion, while non-funded income went up 32.06 per cent to Sh42.22 billion.
The loan book expanded 20.55 per cent to Sh673.91 billion, while holdings in government securities were flat, growing 1.43 per cent to Sh366.45 billion.
The lender said it will, going forward, reallocate investments in government debt to lending to businesses and families, which promises higher returns amid a move to risk-based pricing of loans.
“Continuous pursuit of efficiency gains and our business transformation strategy has repositioned the business for value creation and strategic growth,” chief executive James Mwangi said yesterday.
Equity has reported the second-highest profit growth among the big banks that have published their results so far, with lenders in general set to post record earnings in the full year ending December.
Co-op Bank reported the highest profit jump of 47 per cent to Sh17 billion in the nine months that ended September on the back of higher interest and non-interest income.
I&M Group announced a 25 per cent earnings growth to Sh6.8 billion, also benefiting from higher interest income and fees and commissions.
KCB Group reported a 20.9 per cent net profit rise to Sh30.4 billion. Higher-income from lending and transactions were the key drivers of the earnings growth.
Total interest income increased 13.6 per cent to Sh83.5 billion on account of the expansion of lending and purchase of government debt securities besides rising rates on these assets.
The earnings of Kenyan banks have continued to grow strongly, helped by economic recovery and reduction in loan loss provisions which were pronounced in the initial impact of the Covid-19 pandemic.
The lenders are benefitting from rising interest rates, making new loans and investments in government debt more lucrative now than before.
The rates on T-bills and bonds have been rising in recent months and so has the interest on loans.
The Central Bank of Kenya (CBK) has raised its benchmark rates besides approving risk-based lending frameworks of most commercial banks, allowing them to gradually raise rates.
Some banks, including NCBA Group and DTB Group, have signalled their intention to pay higher dividends going forward, aided by increased profitability.
