Why lenders aren’t worried as Sh59bn wiped off bonds

When Equity Group released its half-year financial results last week, many eyes were drawn to a line on its income statement that showed the lender’s total comprehensive income stood at a negative Sh13.88 billion, yet profit after tax had gone up by 36 percent to Sh24.4 billion.

This was all down to a downward revision in the value of bonds on the bank’s books, essentially an erosion in the paper value of these holdings that comprise both local Treasury bonds and international issuances denominated in hard currencies.