Lubao Production 
After facing a slight setback with a 5% decline in profit after tax in the previous fiscal year, Equity Group Holdings has swiftly bounced back, showcasing robust performance in the first quarter of 2024.
According to a Press release issued on Monday 13th May 2024,the Group has reported a staggering 25% growth in profit after tax, reaching an impressive Kshs.16 billion, marking a significant improvement compared to the same period last year.
Key highlights of the Group’s performance include a notable 29.1% return on average equity year on year, reflecting the resilience and efficiency of the organization’s operations.
One of the standout achievements for Equity Group Holdings during this period was its foray into non-banking sectors, with contributions from sectors such as insurance making up 3.4% of the Group’s profit after tax.
The insurance subsidiary, in particular, marked a remarkable milestone by securing the 4th position in the market with a 9% market share, signaling a promising trajectory in its second year of operation. The subsidiary recorded an astounding 106% growth in profits and an impressive 54% return on average equity.
Dr. James Mwangi, Managing Director and CEO of Equity Group, has attributed the remarkable recovery to decisive leadership and strategic actions taken to adapt to the evolving business landscape.
“The recovery momentum is strong after accepting and adapting to the new normal of operating
in an environment characterized by Volatility, Uncertainty, Complexity and Ambiguity – VUCA. An
environment defined by high inflation, interest rates and volatile currency exchange rates.” He emphasized.
In response to elevated credit risk and challenging market conditions, the Group has implemented enhanced credit risk underwriting measures, resulting in a modest 3% year-on-year growth in the loan book.
Additionally, strategic reallocation of lending towards public sector entities and government securities has helped in mitigating risks, leading to a drop in the cost of credit risk to 2.9%.
Furthermore, the Group’s commitment to operational efficiency and digital transformation played a pivotal role in streamlining costs and improving cost-to-income ratios.
By leveraging digitization and automation, Equity Group has enhanced customer experience while optimizing its cost structure, transitioning from fixed costs to variable costs.
As inflation declines, interest rates stabilize, and exchange rate volatility reduces, the Group is poised to capitalize on the growth potential of East Africa’s thriving ecosystem, underpinned by robust trade connections and the Africa Continental Free Trade Area.
By Joshua Oduor
