Business & Money
Equity Group Reports Kshs 40.9 Billion Q3 2024 Profit Amid Expansion
Equity Group’s board projects steady growth for Q4, fueled by digital innovation and regional expansion. The bank’s Wings to Fly program has already supported over 20,000 students, highlighting its commitment to social impact alongside financial success.
: Equity Group Holdings posts a Kshs 40.9 billion profit for Q3 2024, driven by regional expansion, digital innovation, and a strong focus on financial inclusion.
Equity Group Holdings Plc has announced an impressive profit after tax of Kshs 40.9 billion for the third quarter of 2024, marking a 12% increase from the same period last year.
The performance, driven by strategic regional expansion and digital transformation, underscores Equity’s position as one of Kenya’s largest and most profitable financial institutions.
Record Profit Boosted by Regional Expansion and Innovation
The group’s stellar performance was fueled by robust growth in its interest income, which reached Kshs 105.2 billion, a significant 14% increase from last year’s third-quarter figure.
Non-funded income also contributed to the bottom line, growing by 17% to Kshs 42.8 billion. Speaking on the results, Equity Group’s CEO Dr. James Mwangi highlighted the institution’s resilience and forward-thinking strategy:
“Equity Group’s results reflect our commitment to building a resilient, customer-centric bank,” Mwangi stated. “Our focus on digital innovation and a diversified portfolio across the East African region has enabled us to not only withstand economic fluctuations but also to expand our market share.”
Digital Transformation Powers Transaction Volume
Equity’s focus on financial inclusion through digital banking channels has paid off, with mobile and agency banking fees increasing by 18%.
The bank’s Equitel and EazzyNet platforms continue to record significant transaction volumes, particularly in rural areas where access to banking facilities is limited.
Maintaining Quality: Low Non-Performing Loans
Despite a challenging macroeconomic environment marked by rising inflation and foreign exchange fluctuations, Equity has maintained a strong performance in asset quality.
Non-performing loans (NPLs) were contained at 8.6% of the total loan book, compared to the industry average of 14%.
The bank attributed this to robust risk management practices, including advanced data analytics and credit scoring models that minimize exposure to high-risk clients.
Equity’s Social Impact: The Wings to Fly Program
Equity Group’s board of directors has maintained a cautious yet optimistic outlook for the fourth quarter, expecting continued growth as it pursues digital innovation and geographical expansion. The bank is also actively involved in social impact projects, such as the Wings to Fly scholarship program, which has benefited over 20,000 underprivileged students since its inception.
With Equity Group’s strong performance and commitment to innovative and inclusive banking, the institution remains poised to navigate future challenges while delivering value to shareholders and positively impacting the communities it serves.
Business & Money
Ethiopia Attracts $53.5 Million in Q1 Investments, Creates 8,700 Jobs
: Ethiopia attracts $53.5M in Q1 investments, creating 8,700 jobs. Growth driven
by reforms, with a focus on service and manufacturing sectors.
The Addis Ababa Investment Commission (AAIC) announced a promising start to the
2023/24 fiscal year, with 612 investors registering a combined capital of Birr 2.93 billion
($53.5 million) in the first quarter.
This reflects a 13% growth compared to the same period last year, signalling sustained
investor confidence despite economic challenges.
Speaking at a press briefing on November 30, AAIC’s Director of Communication,
Meseret Woldemariam, credited the growth to policy reforms and enhanced investor
facilitation.
“Our efforts to streamline investment processes and resolve bottlenecks are yielding
results. We remain committed to ensuring investors thrive in Addis Ababa,” she said.
SECTORIAL CONTRIBUTIONS
The majority of the newly licensed investors are in the service and manufacturing
sectors. The service sector includes hotels, tourism, and IT ventures, while the manufacturing
investments span electrical products, steel, wood, and textiles.
These investments have generated 8,707 jobs, comprising 770 permanent and 490
temporary positions created by newly licensed entities.
The AAIC has also initiated field monitoring visits to ensure operational readiness. “Our
team works closely with new investors to address challenges promptly, enabling faster
project rollout,” Meseret added.
CHALLENGES AND REFORMS
Investors continue to face hurdles such as foreign currency shortages and workspace
availability. However, the commission highlighted progress due to macroeconomic reforms,
particularly improving foreign currency access.
“We are actively collaborating with the Mayor’s office to address workspace issues
through professional support in rental solutions and operational guidance,” Meseret
explained.
Recent reforms in the National Bank of Ethiopia’s foreign exchange policy have also
been pivotal. In October, the central bank announced a 30% increase in forex allocation to priority sectors, a move welcomed by stakeholders.
EXPANSION PLANS AND PROJECTIONS
The AAIC aims to capitalise on the momentum, targeting Birr 15 billion ($274 million) in
investments by the end of the fiscal year. A new digital investment portal, launched in November, promises to reduce registration times by 40% and improve transparency.
“We are confident these initiatives will not only attract more investors but also deepen
the trust of existing ones,” Meseret concluded.
INVESTOR SENTIMENT
Prominent business leader Ahmed Yusuf, who recently launched a $3 million IT hub in
Addis Ababa, praised the commission’s efforts.
“The improvements in investor services and forex allocation are encouraging. We hope
to see more streamlined processes for licensing and operations,” he remarked.
As Ethiopia seeks to position itself as a regional investment hub, sustained efforts in
addressing investor concerns and enhancing infrastructure will be critical.
Business & Money
Ethiopia Eyes December Debt Restructuring After IMF Review
: Ethiopia’s December IMF review may unlock long-awaited debt restructuring,
crucial for economic reforms and stalled projects like the Koysha Hydroelectric
Dam.
Ethiopia’s much-anticipated debt restructuring prospects could gain clarity this
December, as the country awaits the second review under its four-year International
Monetary Fund (IMF) program.
The Extended Credit Facility (ECF), launched in August 2023, remains central to
Ethiopia’s economic reform and debt relief efforts.
Progress Toward Debt Treatment
Last week, Ethiopian authorities reached a staff-level agreement with the IMF tied to the
second review. A comprehensive report on this review is set for release in December, a month many stakeholders, including the National Bank of Ethiopia (NBE), view as pivotal for
advancing debt treatment plans.
“Debt restructuring stands at the centre of our reform agenda. With the report’s release,
we expect rescheduling talks to gain momentum,” said Habtamu Workneh, Director of
External Economic Analysis & International Relations at the NBE.
He added that discussions are focusing primarily on extending maturity dates for Ethiopia’s debts.
IMF Support and Engagements with Creditors
The IMF has provided Ethiopia with USD 2.5 billion under its current fiscal program,
offering critical support to the country’s macroeconomic stabilisation efforts.
In parallel, Ethiopian authorities have engaged with Eurobond holders and the Official
Creditors Committee (OCC).
A debt restructuring proposal was submitted to Eurobond holders in July 2024, following
key discussions in December 2023 and May 2024.
Additionally, a global investor update held on October 1, 2024, highlighted the nation’s
ongoing economic challenges and progress in creditor negotiations.
Shifting Debt Landscape
The government has reported improvements in its debt profile. Planning and Development Minister Fitsum Assefa (PhD) announced that Ethiopia had ceased relying on commercial loans and direct borrowing from the central bank.
She noted a significant drop in the external debt-to-GDP ratio to 13.7 per cent, though
the IMF’s Debt Sustainability Analysis, published in July 2024, pegged the ratio at 18
per cent as of June 2023.
External debt accounts for 45 per cent of Ethiopia’s total public and publicly guaranteed
debt, the report stated.
Financing Challenges Persist
Despite these reforms, Ethiopia’s financing challenges remain acute.
The government is seeking nearly USD 1 billion to complete the Koysha Hydroelectric
Dam project, which has stalled at two-thirds completion due to funding shortfalls.
The project is a critical component of Ethiopia’s development strategy, but its delays
underscore the broader fiscal pressures the country faces.
Expert Views on Economic Outlook
While Ethiopian officials are optimistic about the December review as a turning point,
analysts caution that real progress hinges on creditor consensus and the government’s
ability to implement reforms.
Critics have also raised concerns about inflated GDP growth figures, which they argue
may distort Ethiopia’s true debt sustainability.
Looking Ahead
The IMF review, coupled with Ethiopia’s active engagement with creditors, could mark a
a significant step forward in its quest for debt relief.
December will likely be a defining month for the country’s economic future, with broader
implications for its ability to attract investment and complete critical infrastructure
projects.
Business & Money
KCB Group Surpasses Equity with US$ 342.31 Million Nine-Month Profit
: KCB Group reports Sh44.5B ( US$ 342.31) nine-month profit, outpacing
Equity Bank. Learn about its 49% growth, challenges, and stock performance this
year.
KCB Group Plc has outperformed Equity Bank to cement its position as Kenya’s leading
lender, posting a net profit of Sh44.5 billion for the nine months ending September
This represents a 49% year-on-year growth, surpassing Equity Bank’s Sh37.5
billion profit during the same period.
Profit Growth Driven by Core Business Performance
The remarkable profit growth was fueled by higher earnings from both interest and non-
interest income streams. KCB’s diverse revenue base has been pivotal in maintaining
its dominance in the competitive banking sector.
Non-Performing Loans a Key Concern
Despite the impressive profit growth, KCB’s non-performing loan (NPL) ratio rose to
18.5%, compared to 16.5% last year. This increase highlights persistent challenges in
managing credit risk, with Chief Financial Officer Lawrence Kimathi acknowledging it as
a “pain point” for the bank.
KCB Stock Outshines Peers on NSE
KCB’s strong financial performance has translated into exceptional stock market results.
The bank’s stock has risen 78.8% year-to-date, making it the best-performing banking
stock on the Nairobi Securities Exchange (NSE).
Plans to Sell National Bank of Kenya
Earlier this year, KCB announced plans to sell its struggling subsidiary, National Bank of
Kenya (NBK), to Nigeria’s Access Bank. While Nigerian regulators have approved the
deal, it is still awaiting clearance from Kenya’s Central Bank. The sale aims to
streamline KCB’s operations and address losses at NBK.
CEO Paul Russo Optimistic About Year-End Performance
“The journey has not been without its hurdles, but our ability to walk alongside our
customers has driven our success,” said KCB CEO Paul Russo. He expressed
confidence in closing the year on a high note, leveraging improving economic conditions
across the region.
Key Figures at a Glance
● Net Profit: Sh44.5 billion (+49%)
● Non-Performing Loan Ratio: 18.5% (up from 16.5%)
● Stock Performance: +78.8% year-to-date
KCB’s strong performance underscores its resilience in navigating challenges and its
commitment to sustaining growth in Kenya’s banking sector.
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