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Equity Group (NSE:EQTY) has reported 78.6 percent growth in profit after tax for the nine months to September this year on account of the growth of non-funded income and reduced costs.

 

The bank posted Sh26.8 billion net profit compared to Sh15 billion posted in the same period last year.

 

This was attributed to a 28.8 percent growth in non-funded income to Sh31.9 billion including fees and commission income on loans, bond and forex trading income.

Net interest income from both loans and advances, and from investment in government securities rose by 23 percent to Sh48.4 billion.  

 

Total interest income grew by a quarter to Sh80.4 billion from Sh64.1 billion in the previous period.

 

The loan book expanded by 10.7 percent to Sh559.01 billion from Sh504.8 billion in the quarter ended June.

 

“Non-funded income grew by 29 percent faster than the interest income from loan book which grew by 24.4 percent as the bank deployed deposits to high-earning asset base other than government securities.  We continue to look at where we can invest much for revenue,” Equity Group chief executive James Mwangi said during the investor briefing on Monday. 

 

“Total income grew by 25.5 percent compared to 16 percent in the last period.  We expect the opening of economy and removal of curfew will lift the interest higher.’’

 

The lender registered a drop in operating expenses by 3.2 percent over the period to Sh43.8 billion. This was as a result of a 65 percent drop in loan loss provision to Sh51 billion from Sh14.7 billion. However, the gain was offset by 25.9 percent increase in staff costs to Sh13.5 billion and 78.1 percent rise in directors’ emoluments to Sh140.8 million.

 

Gross non-performing loans have dropped by 9.7 percent to Sh56.18 billion from the quarter ended June, representing 10.1 percent of the loan book at Sh559.01 billion.

 

Business Daily Africa