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Equity Group Forecasts Sustained Regional Growth as Bank Posts Huge Profit :: Uganda Radionetwork
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Equity Group Forecasts Sustained Regional Growth as Bank Posts Huge Profit

Equity Bank Group, which is also listed on the Uganda Securities Exchange, is paying shareholders UGX 439 billion in dividends at 117 each.
Dr Mwangi excited over annual performance
The banking industry hopes that the worst is coming to an end for African economies regarding the high cost of international finance.

Most African countries are at different stages of recovery from the economic shocks that characterized the last three years up to last year, with some having overcome the effects faster than others.

The shocks include the COVID-19 pandemic and the closure of economies, the high global inflation led by high fuel prices, the disruptions of trade routes due to the war between Russia and Ukraine, and the relocation of trade opportunities and aid due to divisions caused by geopolitical.

Equity Bank Group Chief Executive Officer, James Mwangi says there are signs, for example, that central banks in the West are beginning to cut interest rates as the global economy recovers.

He was releasing the group financial results for the year 2023, which showed strong performance as profits grew by 49 to 43.7 billion shillings (1.28 trillion Uganda shillings)

Mwangi said high interest rates have been the main challenge to the recovery of African economies which were seeking quick credits to fund their activities to cover the gaps left by the shocks.

Countries ended up borrowing from expensive sources.

He, however, said that western countries have started cutting interest rates, a good sign for global recovery, mainly due to falling inflation.

Already, East African Community Countries, where Equity operates, is recovering well and is named the fastest growing region on the African continent and among the fastest globally.

Rwanda and Tanzania are among the fastest growing economies in the world, and in the EAC, are followed by Uganda, and all three are expected to grow by more than 6 percent.

Mwangi says he expects this growth to be sustainable, at least in the medium term, based on the high remittance inflows, ability to integrate within the global financial market as well as economic resilience.

He says that all the subsidiaries, save for Uganda posted good performance, with the Democratic Republic of Congo coming top followed by Rwanda. 

Going forward, according to him, the growth in the region will be driven by the high investments in infrastructure, with Tanzania leading with the railway construction as well as the gas infrastructure, while the region also has the advantage of the youthful population and high mobile money phone penetration.

The DRC, where Equity commands a 37 percent market share, is also expected to be a growth leader as its minerals sector gets better organized.

Despite the hard times, the group's deposits grew by 29 percent, while total assets went up to 54 trillion shillings (1.8 trillion Kenya shillings).

Equity Group, which is also cross-listed onto the Uganda Securities Exchange has proposed a record dividend of 15.1 billion Kenya shillings (439 billion Uganda shillings) equivalent to 117 Uganda shillings per share, representing a 36 percent payout. 

Equity also claimed the regional financial services leader fit with 50 percent of assets, 51 percent of revenue, and 56 percent of profit before tax being contributed by regional banking subsidiaries.

Its banking subsidiaries are Equity Bank Kenya, Equity Bank Rwanda, Equity Bank Tanzania, Equity Bank Uganda, Equity Bank South Sudan, and Equity BCDC in DR Congo.

Mwangi also unveiled the Equity Insurance Company, a new member of the financial group.

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