By Ayenat Mersie
NAIROBI (Reuters) -Equity Group Holdings, Kenya’s largest lender by customers, said on Tuesday its first-half pretax profit rose by close to a third helped by an expansion in interest income and trade financing.
The bank, which also operates in Uganda, Tanzania, Rwanda, Burundi, South Sudan and Democratic Republic of Congo, also outlined plans to increase regional investments.
Chief Executive Officer James Mwangi said in a presentation that Equity’s increased focus on trade finance was also underpinning income growth.
The 30% rise in pretax profit to 30.9 billion shillings ($258 million) was driven by a 29% increase in total interest income as its loan book grew, with the bank continuing to shift away from government securities.
“Treasury placements with the government securities is now…declining…what is accelerating is lending to the private sector,” Mwangi said.
“This migration, or this realignment, is very powerful” given higher returns on private lending, he added.
Still, the bank did get a boost from treasury income, which climbed 32% to 25.5 billion shillings from 19.3 billion shillings in the same period last year.
Trade finance lending soared 106% to 34.4 billion shillings compared with the first half of last year, helping gross trade finance revenues to jump 64% to 2.6 billion shillings year on year.
To take advantage of this growth, Equity plans to focus on boosting cross-border trade in the East African common market and the African Continental Free Trade Area.
Net interest income climbed to 39.8 billion shillings in the first six months of 2022 from 31.2 billion shillings a year earlier.
Provisions for bad loans also climbed to 4.1 billion shillings from 2.9 billion shillings, said Mwangi.
($1 = 119.7500 Kenyan shillings)
(Reporting by Ayenat MersieEditing by James Macharia Chege)
