NAIROBI, Kenya, Mar 27 – Equity Group Holdings has reported a decline in net profit despite proposing a record dividend of Sh15.1 billion for the second consecutive year.
The decline in profit after tax is attributed to various factors, primarily an increase in interest expenses outpacing the growth in interest income.
This resulted in a 5 percent decline in net profit, which dropped to Sh43.7 billion in the full year ending December last year compared to a comparable year in 2022.
However, the company showed strong momentum in certain areas, such as net interest income and non-funded income, which grew.
“The Sh. 4 per share dividend amounts to a 36% payout of the Kshs.43.7 billion Profit After Tax or Sh. 11.1 earnings per share and dividend yield of 11.9% on the 2023 year-end closing share price of Kshs.33.65 or 800% on par value,” James Mwangi, Equity Group Managing Director and CEO said.
However, total costs went up primarily due to a substantial increase in loan loss provisions to strengthen asset quality buffers.
Additionally, other operating expenses and staff costs increased due to high inflation and the depreciation of the Kenyan shilling.
Despite facing multiple challenges such as interest capping, the COVID-19 pandemic, global supply chain disruptions, and macro-economic headwinds over the past seven years, the Group said its business remained resilient.
Despite the challenges, Equity remains optimistic about its future prospects through its diversified business model, innovation, and risk management capabilities, among others.
