In a challenging macro-economic environment characterized by elevated inflation, ascending interest rates, and the robustness of the US Dollar against local currencies, Equity Group Holdings strategically prioritized its customers over immediate profits. Consequently, in an impressive move, it augmented its loan book, experiencing growth of 26%, escalating from Kshs. 673.9 billion to Kshs. This serves as a clear testament to their unwavering commitment to client-centric operations amidst turbulent market conditions. The company strategically allocated $845.9 billion, aiming to equip its customers with funding flexibility, a crucial tool for navigating the uncertainties spawned by prevailing economic challenges.

The lessons from the Covid-19 pandemic were impactful, with Equity Group providing essential support through loan repayment breaks and restructuring. Learning from this experience led to a recognition of the need to shield customers from the full impact of macro-economic shocks. Dr. James Mwangi, Managing Director/CEO at Equity Group, emphasized the importance of not passing on all burdensome effects of inflation or interest rate hikes directly onto clients. He stressed the strategy of absorbing some operational costs as necessary.

Equity Group demonstrated its commitment to cushioning customers from the full cost of funding, growing its top-line interest income by 32% despite the high funding cost in the current economic climate. Despite a 58% increase in interest expenses on deposits and long-term debt due to a challenging funding environment, net interest income still rose by 21%.

“It constituted a strategic decision,” Dr. Mwangi emphasized, “to fortify our customers’ survival opportunities and resilience during these challenging economic times. We achieved this by absorbing some of the funding costs, thus maintaining loan yields at an almost identical rate – 12.1% for loans and 11.5% for government securities, respectively.”

The group’s steadfast pursuit of long-term strategic geographical expansion and diversification bore positive results even amidst challenging economic conditions. Group deposits escalated by 20%, ultimately peaking at Kshs. 1,208.6 billion, with Kenya alone contributing a significant chunk, 51%. Notably, the diversification of the loan book includes 47.6% in US dollars and encompasses various segments of the economy and eco-systems, with an allocation of 52.4% to local currencies. These sectors comprise retail, MSMEs (Micro, Small, and Medium Enterprises), agriculture, corporate entities, both large enterprises, and those within the public sector.

Evidently, the group focuses on digitization and innovation, with branches handling 5% of loan disbursements, but digital channels processing an overwhelming 95% of transactions. This shift towards cashless transactions, a trend accounting for a staggering 82% of all totals, reflects the broader emphasis on using online methods to conduct business.

Kenya and the subsidiaries each contributed 50% to the Group’s revenue growth of 28%, while non-funded income played a significant role, registering robust growth of 38%. This contribution comprised approximately Kshs. In terms of total income, 129.1 billion; this signifies that non-funded sources accounted for 43.8%.