Equity Posts 51 Pc Growth in 2020 Balance Sheet amid Pandemic Challenges
Despite the tough economic conditions, Equity Group reported a 51% growth in its balance sheet with total assets growing to Sh 1.015 trillion up from Sh 674 billion the previous year.
This growth which was delivered through both organic and merger & acquisition strategies, the bank says, saw the group become the first financial institution to cross the trillion shillings rubicon in East and Central Africa.
The growth has been driven by a 53% increase in customer deposits which grew to Sh 741 billion up from Sh 483 billion.
The bank’s shareholders will not be receiving their dividends for the second year in a row. This is on the recommendation of the Group’s board of directors.
The bank on Monday posted an 11.6% drop in profit after tax of Sh 20 billion in its 2020 full-year financial report. This is a decline from the Sh 22. 39 billion net earnings recorded in the previous year.
The drop in profit is attributed to the effects of the Covid-19 pandemic which slowed down business in 2020.
“To comply with the World Health Organization’s prevention protocols, restrictions put in place … caused global supply chain disruptions due to interruptions of production, distribution, and a reduction of economic activities,’ read a statement from the bank.
In responding to the pandemic, the bank waived charges on mobile transactions amounting to Sh 1.2 billion. It also restructured loans worth Sh 171 billion, waiving Sh 1.2 billion in restructuring fees.
Equity Group spent Sh 1.7 billion in 2020 in supporting frontline workers in their efforts towards fighting the pandemic by procuring PPEs, testing kits and providing logistical support.
The bank grew its loan book by 30% as a result of enhancing its lending activities to MSMEs in order to support economic activities during the pandemic.
Long-term debt financing grew by 71% to Sh 97 billion from Sh 57 billion with shareholders’ funds growing by 24% to Sh 139 billion up from Sh 112 billion.
2020 also saw 98% of the group’s transactions move from physical branch networks to digital platforms. 85% of these were done on mobile and internet banking platforms. 12% were through agency banking, and 3% of the transactions were on fixed costs.