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Equity grows loan book by 30% to support customers and keep the economy lights on

While releasing the results for Q3 2020, Dr. James Mwangi, Group Managing Director and CEO said, “We grew our loan book by 30% year on year in order to support our customers who saw opportunities of green shoots and diversification in the COVID-19 environment. Most of the new opportunities we funded were in manufacturing of PPE’s, logistics, online businesses, agro- processing, fast moving consumer goods and agriculture value chains.”

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Equity Group has reported a 30% growth in its loan book from Kshs 348.9 billion in September 2019 to Kshs 453.9 billion as at 30th September 2020.

While releasing the results for Q3 2020, Dr. James Mwangi, Group Managing Director and CEO said, “We grew our loan book by 30% year on year in order to support our customers who saw opportunities of green shoots and diversification in the COVID-19 environment. Most of the new opportunities we funded were in manufacturing of PPE’s, logistics, online businesses, agro- processing, fast moving consumer goods and agriculture value chains.”

Execution of Equity Group’s twin strategy of being defensive and offensive has proven to be effective despite the challenging environment.

Customer deposits registered a 45% growth from Kshs478 billion to Kshs 691 billion driven by 51% growth in Uganda, 21% growth in Kenya and an additional Kshs130 billion from the acquisition of BCDC in DRC.

Loans to customers grew by 30% driven by 37% growth in Uganda, 19% growth by Equity Bank Congo, 15% growth in Rwanda, 15% growth in Kenya and an additional Kshs 48.5 billion from the acquisition of BCDC in DRC.

The growth in capital weighted loan book and capital geared customer deposits was on the back of a 27% growth in shareholders’ funds following withdrawal of Equity Group Holdings’ 2019 dividend payout.

The balance sheet of the Group grew by 38% from Kshs 677.1 billion to reach Kshs 934 billion.

Regional expansion and business diversification efforts have reduced dependence on Kenya for Group performance making the Group truly a regional financial services provider.

Regional subsidiaries now contribute 40% of customer deposits, 39% of Group total assets, 33% of the loan book, 30% of the Group’s revenue and 25% of the Group’s profit before tax.

On the defensive strategy the Group increased its capital base by 27% to Kshs 137.6 billion from Kshs 108.7 billion to fortify the balance sheet.

The Group’s liquidity position strengthened to 55.7% driven by a 61% growth in cash and cash equivalents and a 34% growth in Government securities.

Maintaining its conservative and prudent approach and in recognition of the challenging operating environment, the Group increased its loan book provision eleven-fold from Kshs1.3 billion to Kshs14.3 billion compared to the same period last year, registering a cost of risk of 4.8% up from 0.8% the corresponding period last year.

To further consolidate liquidity, the Group increased its long-term funding by 7% to Kshs 70.7 billion from Kshs 66.3 billion as shareholders funding grew by 27%.

In its defensive strategy, Equity has worked to support the larger society, communities and customers to weather and mitigate the adverse effects of COVID-19, Equity Group boosted government efforts of containing the pandemic by:

(1)   Waiving fees on mobile banking transactions to discourage the use of cash while incentivizing the use of digital channels;

(2)   Utilizing the expertise of Equity Afia medical team to screen body temperature of customers and staff accessing physical premises including bank branches while supporting COVID-19 health education;

(3)   Leading nationwide initiatives to safeguard frontline health workers through the provision of PPEs and mental wellness and psychosocial support training by the Equity Group Foundation at a cost of Kshs1.3 billion.

(4)   Providing loan repayment accommodation and rescheduling for up to 45% of the customers whose cashflows were deemed likely to be negatively impacted by government set COVID-19 containment measures.

(5)   Supporting staff to cope with the challenges associated with COVID-19 while maintaining a conducive working environment to comply with health protocols and offering choice of working from home were possible.

 

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Bruised Uhuru, Raila to appeal High Court BBI ruling

The five-judge bench ruled that the BBI process, which had been championed by President Uhuru Kenyatta and Mr Odinga, had multiple legal blunders, trashing it in totality.

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President Kenyatta and former PM Raila Odinga unveiling the BBI document. Photo/Courtesy

Former Prime Minister Raila Odinga says he is disappointed by the Thursday High Court ruling that annulled the Building Bridges Initiative and the Constitution Amendment Bill, 2020 process.

However, he called for restraint in the public commentary about the ruling. In particular, he urged BBI proponents to restrain from personalized attacks on the court and its members.

He explained that the Judiciary sits at the centre of the democratic experiment in both established and emerging democracies, terming it as a pillar of the country’s democracy.

“We may disagree with the court but we must respect its ruling and its freedom to exercise its judgment as it understands the legal and constitutional matters before it,” he stated in a press release.

He said the Constitution provides for the right of appeal of a decision with which one feels aggrieved and would be appealing the ruling of the five-judge bench on the BBI Bill.

The five-judge bench ruled that the BBI process, which had been championed by President Uhuru Kenyatta and Mr Odinga, had multiple legal blunders, trashing it in totality.

“We will calmly and respectfully move to the Court of Appeal to present our case as to why we think the High Court did not render the right verdict,” he revealed.

He said they would do so with sobriety and with respect for the judges and courts. Ultimately, he said, the objective is to strengthen, not undermine, the Judiciary.

Mr Odinga said BBI is a project of opportunity, equity, and equality for all that seeks to build a country of strong institutions and where citizenship means the ability and opportunity to realize one’s full humanity.

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Governor Lee mourns PSC Chairman Kirogo

Before he was appointed PSC Chairperson, Mr Kirogo was the Principal Administrative Secretary/Assistant Secretary to the Cabinet in the Presidency and Cabinet Affairs Office since 2012.

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Public Service Commission Chairman, Mr Stephen Kirogo

Governor Lee Kinyanjui has sent a message of condolence to the family and friends of Public Service Commission Chairman, Mr Stephen Kirogo who passed on yesterday.

The Governor in a Facebook post said Mr Kirogo was a distinguished public servant who contributed immensely to the transformation of Kenya’s public service space.

“He was a career civil servant who rose through the ranks to head the public service. He was a dedicated civil servant who discharged his duties with commitment and patriotism,” he stated.

He added that the country had lost a man of honour and an asset to the nation as a career administrator with solid credentials and a track record of public service spanning over thirty years.

His appointment as Chairperson of the Public Service Commission in August 2018 capped an illustrious career that began in 1984 as an Assistant Secretary in the Office of the President.

Before he was appointed PSC Chairperson, Mr Kirogo was the Principal Administrative Secretary/Assistant Secretary to the Cabinet in the Presidency and Cabinet Affairs Office since 2012.

He was the Chairman of the Board of Management of Ndururumo Secondary School in Laikipia County, member of the Board of Bahati Girls High School in Nakuru County and Vice Chairman of the Anglican Church of Kenya Parish Council.

Also, he was a Fellow of the Public Relations Society of Kenya and a member of the Public Service Club among other professional and community organizations.

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Mixed reactions as Court annuls BBI process

Governor Lee Kinyanjui added that the journey to constitutional changes is full of obstacles and that tonight’s ruling stopping the BBI process was one of them.

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President Kenyatta and former PM Raila Odinga unveiling the BBI document. Photo/Courtesy

The High Court has ruled that the process to amend the constitution is unconstitutional, null and void, throwing the future of the initiative into uncertainty.

The five-judge bench ruled that process, which had been championed by President Uhuru Kenyatta and opposition leader Raila Odinga, had multiple legal blunders.

The judges have ruled that President Kenyatta does not have the power to directly initiate constitutional amendment under the law and it is Parliament that has such power.

A bench comprising Justices Joel Ngugi, George Odunga, Jairus Ngaah, Teresia Matheka and Chacha Mwita also ruled that that the 14-member Building Bridges Initiative (BBI) task force was an illegal entity.

“An injunction is hereby issued barring IEBC from undertaking any processes with regards to the amendment of the constitution,” ruled the bench in a session streamed live across media platforms.

Tonight’s ruling has been received with mixed reactions from across the political divide on the nullification of the Building Bridges Initiative process that has defined national politics for some time.

Deputy President William Ruto, who has openly challenged the Constitution of Kenya (Amendment) Bill, 2020 since its inception, celebrated moments after the ruling.

“There is GOD in heaven who loves Kenya immeasurably. May GOD’S name be praised forever,” he tweeted attracting thousands of comments from across the political board.

in Nakuru, Governor Lee Kinyanjui said the BBI proponents respect the court ruling even though key matters raised by the BBI team had not been sufficiently prosecuted.

“……. and therefore the need for immediate appeal to the decision,” he stated in a Facebook post adding that Kenyans should respect the right to disagree, that is democracy.

He added that the journey to constitutional changes is full of obstacles and that tonight’s ruling stopping the BBI process was one of them.

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