• Equity Group CEO Dr. James Mwangi says regional lender experienced the biggest transformation in Tanzania business, hitting 4% return on assets and 27% return on equity during the six months ended June 30, 2025.
  • Equity’s Tanzania subsidiary’s net profit surged by 75% to $8.5 million (KES1.1Bn) up from $4.6 million (KES600M) reported in June 2024.
  • However, bank says regional economies suffered depressed GDP numbers, high interest rates, volatile exchange rates and high inflation during the period.

For Equity Group, its strategy to grow regional footprint beyond Kenya has continued to pay off with the bank’s subsidiaries accounting for half of the lender’s revenue and 43 per cent of its net earnings in the six-month period ended June 30, 2025.

Equity Group posted a 17 per cent increase to $267.4 million (KES34.6 billion) in record half-year profit, a strong jump from $228.7 million (KES29.6 billion) in June 2024 for the Nairobi-headquartered lender with presence in Tanzania, Uganda, South Sudan, Rwanda and in the Democratic Republic of Congo.

Group CEO Dr. James Mwangi said the strong results were driven by a 9 per cent increase in net interest income in a period when the bank also experienced 18 per cent decline in interest expense.

The Group defied the prevailing macroeconomic environment marked by uncertainty, depressed GDP numbers, growth rates, high interest rates, volatile exchange rates and high inflation to record a 4 per cent increase in loan book to $6.38 billion (KES825.1 billion).

Additionally, deposits from customers posted two per cent increase to $10.2 billion (KES1.32 trillion) even as the lender’s total assets increased by three per cent to $13.9 billion (KES1.8 trillion).

“Our regional subsidiaries have contributed: 49 per cent of deposits, 50 per cent of the loan book, 48 per cent of our assets, 50 per cent of revenue and 46 per cent of profit before tax,” said Dr. James Mwangi, Equity Group CEO during an investor briefing on Monday.

Read also: Equity Bank, Kenyan investors raid DRC for multibillion dollar opportunities

Strongest quarterly performance in four years

Dr. Mwangi explained that the Group registered the strongest quarterly performance in the three months to June, 2025 of KES22.9 billion and Q1 2025 of KES18.6 billion both above the quarterly average for the last four years, of KES14.8 billion despite the muted loan book growth, geopolitical uncertainty attributable to the lender’s ongoing transformation strategy: Africa Recovery and Resilience Plan (ARRP).

“The execution of the strategic business plan has started to reflect on the balance sheet and performance of the Group in agriculture, mining, manufacturing, trade and investment, and small and medium enterprises (SMEs) that populate the eco-systems of the formal sector in these value chains and is likely to significantly and increasingly transform the structure and performance of the Group,” noted Dr. Mwangi.

“Continued execution has resulted in transformation of the balance sheet structure and the resultant profit and loss structure creating resilience in performance.”

The Group’s loan book quality peaked to 14.0 in the six months to June, 2025 from 12.9 in H1 2024 to 13.7 in H1 2025, driven by improvement in NPL ratios of Equity Bank Tanzania 2.9 per cent, down from 10.6 per cent and Equity Bank Uganda which registered NPL ratio of 12.2 per cent, down from 17.9 per cent.

Equity Group outperformed the Kenyan industry registering NPL ratio of 13.7 per cent against industry average ratio of 17.6 per cent as at April 2025, while maintaining an IFRS NPL coverage of 68.2 per cent.

Equity Group
Equity Group Quarter-on-Quarter performance comparison.

 

Equity Group Subsidiaries’ H1 2025 Performance

Across the Group subsidiaries, Tanzania experienced the biggest turnaround, as the unit’s net profit surged by 75 per cent to KES1.1 billion up from KES600 million reported in June 2024.

“The biggest transformation we’ve seen has been in Tanzania, where the entire business has experienced remarkable growth, strengthening our presence and impact in the region. It has hit 4 per cent on Return on Assets and 27 per cent on Return on Equity,” explained Dr. Mwangi.

The bank said shareholders’ funds in the Tanzania unit increased by 67 per cent to KES10.7 billion compared to KES6.4 billion reported in June last year. During the half, loans and advances in Tanzania market went up by 19 per cent to KES31.3 billion from KES26.2 billion reported a year ago.

Additionally, Equity’s Uganda business saw net profit rise by 40 per cent to close the half at KES1.9 billion from KES1.4 billion during the comparable quarter. What’s more, customer deposits increased by 5 per cent to KES96.8 billion from KES91.9 billion fueling growth of cash and bank balances by 11 per cent to KES25.7 billion from KES23.1 billion and growth of investment securities by 14 per cent to KES36.8 billion from KES32.3 billion earlier.

In Rwanda, Equity’s subsidiary saw total assets post 21 per cent increase to KES130.1 billion up from KES107.6 billion in a move which that bank said is attributable to a 22 per cent growth in deposits to KES94.7 billion from KES77.7 billion.

Loans and advances to customers saw the loan book expand by 23 per cent to KES56.1 billion from KES45.5 billion.

The net earnings for Equity Bank Kenya increased by 40 per cent to KES19.5 billion from KES13.9 billion previously even as net interest income soared by 18 per cent to KES32.8 billion from KES27.7 billion after 29 per cent decline on interest expense to KES18.3 billion down from KES25.6 billion.

In the DRC, net profit increased by 22 per cent to KES9.1 billion from KES7.4 billion while loans and advances grew by 13 per cent to KES275.4 billion from KES244.2 billion funded by a corresponding decline in cash from KES271.4 billion down to KES236.5 billion.

“We are well positioned to become systematically relevant in both Kenya and the DRC, strengthening our role in driving economic growth and financial inclusion,” added Dr. Mwangi.

Overall, Equity Group’s regional diversification of the banking business continues to register success transforming from just a Kenyan bank to a regional financial institution with 49 per cent of deposits, 50 per cent of loan book, 48 per cent of total banking assets and 50 per cent of Group banking revenue coming from the region.

Equity Group
Equity Group Insurance Business Performance.

Equity’s Insurance Business

Now in its 3rd year of operations, the Group’s life insurance business has become the second largest group credit insurance company with a market share of 7 per cent of group life and credit life, and the seventh in life insurance in terms of return on Equity.

During the half, Equity Life Assurance saw its gross written premiums increase by 58 per cent to KES3.8 billion up from KES2.4 billion with net insurance and investment revenue growing by 18 per cent to KES953 million up from KES808 million.

Furthermore, the insurance unit’s pre-tax earnings went up by 20 per cent to KES890 million from KES740 million event as insurance contract liabilities grew by 22 per cent to KES23 billion.

The insurance business saw total assets go up to KES28.6 billion up from 22.4 billion

The General insurance, which began operating this year, has had a strong start with a KES1.36 billion gross written premiums within six months generating KES640 million insurance revenue to register a profit before tax of KES32 million, a 6.6 per cent return on equity and a 2.8 per cent return on assets.

Additionally, Equity Insurance Group registered a 26 per cent growth in profit before tax supported by a 115 per cent increase in gross written premiums, of KES5.181 billion up from KES2.414 billion.

“We are no longer just a Kenyan banking group, but a financial group that brings banking and insurance together, recognizing that there has already been a convergence between banking, technology, and insurance,” stated Dr. Mwangi.

*(1USD = KES129.41)