Equity Group Holdings Plc has posted a 14 percent decline in net profit in the first three months of the year to hit Sh5.3 billion, attributable to increasing its loan loss provision by ten fold to Sh3 billion from Sh300 million the previous year.
Profit before provisions was up by 10 percent to Sh10 billion from Sh9.1 billion the previous year.
“The global Covid-19 pandemic has mutated into a global economic crisis, occasioned by a sudden standstill of economic activity as a result of the global lockdown. This has introduced unprecedented uncertainty within the global financial systems prompting us to adopt a conservative approach – fortifying our balance sheet and assuring ample liquidity to support our customers,” James Mwangi Group MD and CEO said.
The Group’s total assets went up by 14 percent year on year growth to Sh693.2 billion from Sh605.7 billion driven by a 17 percent growth in customer deposits to Sh499.3 billion from Sh428.5 billion.
Net interest income grew by 11 percent on the back of a 24 percent year on year growth on loan book to Sh379.2 billion up from Sh 305.5 billion.
Regional subsidiaries increased their total revenue to the group to 30 percent up from 28 percent previous year.
Mwangi says the firm stands well positioned to confront the challenges of the COVID-19 disruption that is mutating into an economic, financial and humanitarian crisis.
On Tuesday, the Board of Directors withdrew its recommendation of a Sh9.5 billion dividends pay out to its shareholders for the 2019 financial year.
“A strong capital and liquidity position give us the strength and capacity to cushion our business against external shocks and accommodate and walk with our customers during these challenging times,” added Mwangi.
He added that Equity has restructured customers’ loans of up to Kshs. 92 billion for up to three years as an economic relief effort to the COVID-19 crisis.
“We will walk with our clients through this crisis and will give every client a chance to turn the crisis into an opportunity to thrive. Equity Group will deploy its capital strength, balance sheet agility and liquidity to support a long-term view,” Mwangi noted.