KENYA · BANKING

The Kenyan lender has reported an Equity Group half-year profit of KSh45.5 billion, about US$351 million, up 32% and the highest six-month figure in its own accounts. The more consequential number is that its businesses outside Kenya now hold most of its deposits, loans and assets.

The Equity Centre in Upper Hill, Nairobi, the group’s headquarters. (Photo: Equity Bank, CC BY-SA 2.0, via Wikimedia Commons)

The results

Equity Group Holdings published its half-year figures in Nairobi on 19 August. Profit after tax came in at KSh45.5 billion for the six months to June, against KSh34.6 billion a year earlier.

Profit before tax rose 39% to KSh57.8 billion from KSh41.5 billion. Total income was up 25% at KSh124.9 billion.

Net interest income grew 17% to KSh69.3 billion. Non-funded income, meaning fees and transaction revenue, rose 36% to KSh55.6 billion and now makes up 44.5% of the total.

The balance sheet expanded 20% to KSh2.16 trillion, roughly US$16.7 billion at the central bank rate for 20 August. Customer deposits rose 21% to KSh1.59 trillion and net loans 19% to KSh981 billion.

What is really driving the Equity Group half-year profit

The regional subsidiaries. They now account for 42% of the group’s banking profitability and 47% of its banking revenue.

On the balance sheet the shift has already crossed the line. Subsidiaries hold 51% of group deposits, 54% of loans and 52% of banking assets.

The Kenyan bank is still the largest single unit, with profit after tax of KSh25.7 billion, up 32%. But the Congolese business, Equity BCDC, earned KSh11.8 billion, up 30%, and Tanzania grew 82% to KSh2.0 billion.

Rwanda contributed KSh2.9 billion. The group banks in six markets and has said it is aiming at fifteen countries and 100 million customers by 2030.

The credit book got better, not just bigger

The non-performing loan ratio fell to 9.5% from 13.7% a year earlier. Coverage rose to 70% from 68% and the cost of risk dropped to 1.4% from 1.7%.

Loan loss provisions were 6% lower than a year ago even as the book grew 19%. Management attributes that to the improvement in asset quality; it is also the line an analyst would test first.

Cost-to-income improved to 48.6% from 51.7%. Shareholders’ funds rose 27% to KSh350 billion.

A return on equity of 26.5% is high by the standards of listed African banks. Return on assets was 4.5%.

The scale that makes it work

Equity says it serves 23.3 million customers through 410 branches, 886 automated teller machines, 92,572 agency outlets and 1.4 million merchants. The branch count is almost beside the point.

Some 98.3% of transactions happen outside a branch and 89.7% are digital. That is the cost structure behind a sub-50% cost-to-income ratio.

Chief executive Dr James Mwangi framed the period as proof of a “deliberate transformation into a diversified, regional, technology-enabled financial services Group”. The insurance arm wrote KSh6.4 billion of gross premiums, up 24%, with 79% of policies distributed digitally.

How it compares at home

Kenyan banks have had a strong half-year across the board, so Equity is not an outlier in direction, only in scale. KCB, the other large lender on the Nairobi exchange, lifted profit 21% with a similar story about its non-Kenyan units carrying more weight.

The sector-wide backdrop is less comfortable. The World Bank noted this week that Kenyan banks hold roughly KSh2.2 trillion of government securities, about 27% of total banking assets, and put the industry’s gross non-performing loan ratio at 15.6% in March 2026.

Against that, Equity’s 9.5% looks strong. It also means the group’s headline safety partly reflects the fact that a majority of its book is no longer Kenyan.

What to watch

Two things are missing from the release. There is no interim dividend declaration and no earnings-per-share figure, so shareholders have less to work with than the headline suggests.

The other is concentration risk of a new kind. A Kenyan-listed bank whose majority of assets sit in the Democratic Republic of Congo, Uganda, Tanzania, Rwanda and South Sudan carries a very different risk profile from the one its shareholders bought a decade ago.

That is the trade the group has made. Faster growth outside Kenya, in exchange for exposure to currencies and legal systems that are harder to price from Nairobi.

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