Equity Group of Kenya Full-Year Net Jumps as Loans Increase

Updated on

Equity Group Holdings Ltd., which owns Kenya’s biggest lender by market value, said 2014 profit jumped 29 percent as its local unit increased lending, beating analysts’ estimates.

Net income climbed to 17.2 billion shillings ($188 million) in the 12 months through December from 13.3 billion shillings a year earlier, Chief Executive Officer James Mwangi told reporters Tuesday in the capital, Nairobi. Net interest income, the money earned from charges on loans, gained 10 percent to 29.2 billion shillings as lending surged 25 percent to 214.2 billion shillings.

“The group’s performance was supported by strong underlying fundamentals, including a 24 percent growth in the balance sheet,” Mwangi said. The median estimate of 10 analysts surveyed by Bloomberg was for net income of 15.6 billion shillings.

Kenya’s central bank has held its key lending rate at 8.5 percent for almost two years, helping maintain stability in East Africa’s biggest economy and spurring growth in loans to 1.97 trillion shillings in the 12 months through December, compared with 1.6 trillion shillings a year earlier.

Equity also has operations in the East African nations of Uganda, Tanzania, Rwanda and South Sudan, where together earnings before tax more than quadrupled as they returned to profit, Mwangi said.

Shares Gain

Equity’s shares traded 3 percent higher at 52.50 shillings by 12:49 p.m. in Nairobi, taking its gain for the year to 4 percent.

Equity Bank’s sale last year of its 24.75 percent stake in Housing Finance Ltd. to British-American Investments Co. boosted the lender’s earnings, Faith Atiti, a research analyst at Nairobi-based CBA Capital Ltd. said by phone on Tuesday. The bank earned 2.78 billion shillings from the sale, according to a statement distributed on Tuesday.

“The results are impressive following the gain from selling its stake in Housing Finance,” Atiti said. “The strong growth in non-funded income is commendable and will sustain earnings growth going forward.”

(Updates with comment from analyst from penultimate paragraph.)
    Before it's here, it's on the Bloomberg Terminal. LEARN MORE