Equity Group Holdings Plc, Kenya's biggest lender by market value, increased provisions for loan losses by eight times causing profit for the six months through June to drop 24%.
Net income slipped to 9.02 billion shillings ($83.2 million) as provisions surged to 8.02 billion shillings from 918.5 million shillings a year earlier, according to a statement emailed Tuesday by the Nairobi Securities Exchange. Gross non-performing loans jumped 56% to 45.6 billion shillings, while net interest income -- the money lenders make from issuing loans -- grew 17% as loans and advances to customers rose 22%.
“In light of the markets we operate in being characterized by a thriving real estate, tourism, travel, private education, transport, logistics, trade and commerce, we have determined that 45% of our clients' loans would need flexible accommodation on loan repayments,” according to an emailed statement from the Nairobi-based lender with a presence in seven nations including the Democratic Republic of Congo and Ethiopia.
Equity shares have fallen almost 44% year-to-date, compared with a 21% decline by the NSE All-Share Index.
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