Home Business Equity Group Defies COVID-19 Impact To Register 51% Balance Sheet Growth

Equity Group Defies COVID-19 Impact To Register 51% Balance Sheet Growth

by Femme Staff
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The year 2020 was like no other.  COVID-19 struck at the beginning of the year and the East Africa region had its first case of infection in early March. The global spread of the virus quickly became a pandemic.

To comply with the World Health Organization’s prevention protocols, restrictions put in place including limitations on movement and travel, social distancing, and constrained interactions resulted in economic slowdowns which in turn caused global supply chain disruptions due to interruptions of production, distribution, and a reduction of economic activities.

By April, the health pandemic had turned into an economic crisis with lost lives and livelihoods resulting into a dilapidating humanitarian crisis characterized by lost jobs, unemployment, lost investments, hunger, poverty, human misery, unhappiness, fear and uncertainty.

Releasing 2020 Full Year results, Equity Group Managing Director and CEO Dr. James Mwangi said, “The previous global pandemic was the Spanish Flu which occurred in 1919, a century back, and hence the world had lost its memory and had to re-learn, adapt and adjust making 2020 an exceedingly difficult and challenging year.  Our corporate purpose of ’Transforming lives, giving dignity and expanding opportunities for wealth creation’ became the guiding compass of the organization’s essence on how to navigate through the crisis and the challenging environment. Our results and performance became a human story of resilience and determination to live an ethical human purpose.”

The 2020 results reflect a purpose lived and a management team uniquely differentiated by the decisions it made. From the onset, Equity Group management opted to safeguard and cushion the lives of staff, clients, and host communities by supporting lives and livelihoods through maintaining economic activities to keep the lights of the economies on and boosting Government efforts with Kshs 4 billion initiatives. Interventions included.

  • Waiving mobile charges of Kshs 1.2 billion to enhance households’ disposable incomes while at the same time sensitizing clients to adopt mobile, digital, and online banking, in compliance with health protocols of reduced mobility, minimized interactions, promoting hygiene, and maintaining social distancing.
  • Offering opportunities for loan accommodation up to 45% of the loan book, to minimize disruption and allow re-adjustment to match new cash flows while waiving rescheduling fees of Kshs 1.2 billion.
  • Maintaining and enhancing lending activities resulting in a 30% growth in loan book thus supporting economic activities that provided for livelihoods and keeping the lights of the economy on, while offering oxygen to new green shoots of opportunities through retooling, repurposing, reforming and adapting to new opportunities in the marketplace, capital re-allocation and new consumption patterns.
  • Mobilizing and contributing Kshs 1.7 billion to support community efforts towards fighting the COVID-19 pandemic by procuring and providing testing kits, logistical support and PPEs for frontline health workers in public COVID-19 management health centers as well as supporting a robust mental health and psychosocial wellness program for frontline healthcare workers.
  • Supporting 17,800 Wings to Fly and Elimu Scholars to cope with the prolonged school closure and providing them with solar powered radios and lamps with a mobile charging unit that allowed them to continue learning while providing for their life’s essentials financed by a monthly stipend with the support of our partner Mastercard Foundation.
  • Supporting staff and clients by mobilizing Equity Afia, an Equity Group associate health franchise, to spearhead COVID-19 awareness, health education of prevention measures and coping mechanisms while maintaining job security for all staff without subjecting them to salary freezes or reductions, while accommodating more than   50% of the staff to work from home.

The Group has weathered the COVID-19 disruption to register a 51% growth in its balance sheet with total assets growing to Kshs 1.015 billion (One trillion and fifteen billion shillings) up from Kshs 674 billion the previous year.

The growth delivered through both organic and merger & acquisition strategies saw the group become the first financial institution to cross the trillion shillings rubicon in East and Central Africa. The growth has been driven by a 53% increase in customer deposits which grew to Kshs 741 billion up from Kshs 483 billion, while long-term debt financing grew by 71% to Kshs 97 billion from Kshs 57 billion with shareholders’ funds growing by 24% to Kshs 139 billion up from Kshs 112 billion.

For the first time ever, branches handled less than half of transaction value, accounting for only 37.4% of such value with the 62.6% of the value of transactions taking place outside the branch. Adoption of digital payments was accelerated with the number of transactions processed over the Pay with Equity solutions growing by 31% and the value of the transactions growing by 58% to reach Kshs 2 trillion up from Kshs 1.3 trillion. The Group intensified its social impact investments for shared prosperity with communities. Cumulative spend on shared prosperity programmes reached Kshs. 51 billion equivalent of US$ 464,515,524. The Group’s flagship secondary school scholarship programmes, Wings to Fly and Elimu, delivered in partnership with Mastercard Foundation, KfW and Government of Kenya reached 26,304 beneficiaries. Pre-university paid internship beneficiaries reached 6,713 while scholars who had attended universities reached 13,775 with633 scholars attending or alumni of global universities.

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