Equity Group profit jumps 24pc as lender expands deposits, cuts bad loans exposure

May 19, 2026 in Business, Companies, Finance, Financial Services by Editor

Equity Group has reported a sharp rise in first-quarter 2026 profits as strong deposit growth, rising transaction income and improving asset quality helped cement its position among Africa’s strongest banking franchises.

 

Equity Group Holdings has posted a strong first-quarter performance for 2026, underlining the resilience of East Africa’s banking sector amid tightening regional credit conditions and persistent macroeconomic volatility.

The regional lender reported a 24 percent rise in profit after tax attributable to shareholders to KSh18.3 billion for the three months ended March 2026, up from KSh14.8 billion recorded during the same period last year.

The results cement Equity’s position as one of Africa’s strongest banking franchises by profitability, liquidity and capital strength, even as lenders across the region grapple with slower private-sector credit uptake, foreign exchange volatility and elevated loan defaults.

The group’s total assets expanded to KSh2.04 trillion from KSh1.75 trillion a year earlier, driven by growth in customer deposits, investment securities and regional banking operations.

Customer deposits climbed to KSh1.48 trillion, compared to KSh1.31 trillion in the corresponding quarter of 2025, reinforcing Equity’s dominance in retail and SME banking across East and Central Africa.

Net loans and advances to customers stood at KSh873.5 billion, slightly down from KSh882.5 billion at the close of 2025, suggesting the lender remained cautious on credit expansion despite improving economic conditions in some regional markets.

Non-interest income strengthens

A major driver of the quarter’s performance was the continued expansion of non-funded income streams, highlighting the growing importance of transaction banking, foreign exchange operations and digital financial services in African banking profitability.

Group non-interest income rose to KSh22.3 billion during the quarter, supported by strong growth in fees and commissions, foreign exchange trading income and transaction services.

Foreign exchange trading income alone rose to KSh3.33 billion from KSh2.69 billion a year earlier, reflecting sustained currency market activity across the region.

The lender’s diversified revenue structure continues shielding it from pressure on traditional lending margins as interest-rate cycles stabilize across East Africa.

Total operating income increased to KSh55.3 billion from KSh48.2 billion a year earlier.

Asset quality improves

The results also pointed to improving asset quality trends after years of elevated credit stress linked to post-pandemic economic disruptions and currency depreciation pressures in several African markets.

Gross non-performing loans declined to KSh109.5 billion from KSh132.8 billion recorded in March 2025.

Net non-performing loan exposure fell sharply to KSh4.17 billion from KSh52.4 billion a year earlier after accounting for provisions and collateral coverage.

Loan-loss provisions declined to KSh2.8 billion during the quarter from KSh3.37 billion in the corresponding period last year, signaling easing credit impairment pressures.

The group maintained strong provisioning buffers, with total loan-loss provisions standing at KSh49.3 billion.

Capital and liquidity remain robust

Equity continued to maintain capital ratios comfortably above regulatory thresholds, giving the lender significant balance-sheet flexibility as competition intensifies in regional banking markets.

The group’s total capital adequacy ratio stood at 19.1 percent against a statutory minimum requirement of 14.5 percent.

Liquidity also remained exceptionally strong, with the group’s liquidity ratio at 64.7 percent — more than triple the regulatory minimum of 20 percent.

The lender’s core capital-to-risk weighted assets ratio stood at 17.7 percent compared to the minimum requirement of 10.5 percent.

Analysts say the strong liquidity position reflects continued customer confidence in the bank’s deposit franchise and provides room for future lending growth as regional economies stabilize.

Regional banking expansion paying off

The results reinforce Equity Group’s transformation from a Kenyan banking institution into a diversified regional financial services conglomerate with operations spanning East and Central Africa.

The bank has increasingly relied on regional subsidiaries and non-banking businesses such as insurance, investment services and digital payments to drive growth beyond the mature Kenyan banking market.

The lender also highlighted a string of recent industry recognitions, including being ranked among Africa’s strongest banking brands and one of the continent’s most valuable financial institutions.

Group Managing Director and CEO James Mwangi signed off the results alongside Group Chairman Isaac Macharia.