Equity Group Holdings Limited · NSEKE:EQTY
Equity — H1 2023 Earnings Presentation
80 slides from Equity's earnings presentation, Aug 1, 2023
Slide 1: Investor Briefing H1 2023 Performance
INVESTOR BRIEFING H1 2023 PERFORMANCE
Slide 2: Equity Group Holdings Plc Investor Briefing
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE 2
Slide 3: Equity Group's Philosophies
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Equity Group’s Philosophies Our Purpose: Positioning Statement: Transforming lives, giving dignity and expanding We provide inclusive financial services that transform opportunities for wealth creation livelihoods, give dignity and expa
Slide 4: Governance and Organizational Structure
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Governance and Organizational Structure 4
Slide 5: Governance & Risk Management Framework
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Governance & Risk Management Framework 5
Slide 6: Governance & Responsibility Framework
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Governance & Responsibility Framework 6
Slide 7: Governance and Organizational Structure
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Governance and Organizational Structure Breadth and Depth of the Management Team EGH Strategy Alignment of strategy and execution reflected by close interaction between the CEO’s office and Corporate Office Breadth and diversification r
Slide 8: Group Executive Management
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Group Executive Management Dr.James Mwangi,CBS Mary Wamae Samuel Kirubi Group Managing Director & Group Executive Director Group Chief Operating Chief Executive Officer Officer Samuel Makome Brent Malahay Gertrude Karugaba Sam Gitwekere
Slide 9: Group Executive Management
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Group Executive Management David Ssegawa Ignatius Chicha Rene Kalonji Christine Browne Group Director Human Group Director Treasury Chief Product Officer Group Director Special Resources Operations Assets Joy DiBenedetto Michael Kwofie
Slide 10: Group Executive Management
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Group Executive Management Gerald Warui Isabella Maganga Anthony Kituuka Managing Director, Managing Director, Managing Director, Equity Bank Kenya E q u i t y B a n k Ta n z a n i a Equity Bank Uganda Victor Omondi Hannington Namara An
Slide 11: Group Board of Directors
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Group Board of Directors Prof. Isaac Macharia Dr. James Mwangi, CBS Non-Executive Chairman Group Managing Director and Chief Executive Officer Mary Wamae Dr. Edward Odundo Vijay Gidoomal Jonas Mushosho Group Executive Director Non-Execu
Slide 12: Equity Group Holdings Plc Investor Briefing
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE 12
Slide 13: Press Release
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE PRESS RELEASE EQUITY GROUP HOLDINGS REGISTERS KSH 26.3 BILLION PROFIT AFTER TAX IN IT’S 2023 HALF YEAR RESULTS • Growth In Assets Of 23% To Reach Kshs.1.645 trillion. • Net Loans Register 26% Growth • Subsidiaries Contribute 46% Total A
Slide 14: Press Release (Continued)
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE PRESS RELEASE (Continued) to 1.9% up from 1.3% driven by 89% growth in provisions to cover the risk of rising portfolio at risk (PAR) ratios. Given the VUCA operating environment the Group strengthened its leadership bench by recruiting
Slide 15: Macroeconomic and Operating Environment
Macroeconomic and Operating Environment
Slide 16: Global macro environment
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Global macro environment Further rate hikes expected from major central banks • The world’s major central bankers have indicated that further tightening of monetary policy is likely, to counter inflation which remains above their target
Slide 17: East Africa – fastest growing region in the world
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE East Africa – fastest growing region in the world Governments bringing down their budget deficits • The government budgets proposed in June by most of the member states of the East African Community, indicated fiscal consolidation, impl
Slide 18: Overview of the Africa Recovery and Resilience Plan
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Overview of the “Africa Recovery and Resilience Plan” The Plan 6 Pillars of the Plan Objectives of the Plan The Africa Recovery and Resilience The Plan comprises 6 strategic pillars that ensure a The first phase (end-2030) objectives of
Slide 19: 2030 Strategy Framework
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE 2030 Strategy Framework 2025 Strategy Framework Equity Group’s 2030 strategy is a multi-pronged and holistic solution to achieve social and economic transformation of Africa. The strategy comprises 6 strategic pillars that will be opera
Slide 20: Equity Bank Business Model and Strategy
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Equity Bank Business Model and Strategy 20
Slide 21: Equity Bank Business Model & Strategy Focus
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Equity Bank Equity Bank Business Business Model Model &Focus & Strategy Strategy Focus Inclusive, High volume, Low Margin, Digital and Experiential, Agile and Quality-Driven Inclusive, High volume, Low Margin, Digital and Model Business
Slide 22: Non-Funded Income Growth
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Non-Funded Income Growth Focus Area 1: Non-Funded Income Growth Kes Billion Gross Loan Interest Gross Interest Income Non-Funded Income Contribution to Total Income Income Growth Trend Growth Trend Growth Trend +27% 82.1 +27% +28% 69.8
Slide 23: Focus Area 1: Non-Funded Income – Trade Finance Performance
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 1: Non-Funded Income Trade Finance Performance 23
Slide 24: Focus Area 1: NFI Contribution
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 1: NFI Contribution 24
Slide 25: Focus Area 2: Treasury Efficiency
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 2: Treasury Efficiency 25
Slide 26: Subsidiaries Performance and Contribution
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Subsidiaries Focus Performance and Contribution Area 3: Subsidiaries Performance and Contribution Kes Billion Other Subs Other Subs Equity Finserve Other Subs Total EBKL Group H1 2023 EBTL EBRL EBUL EBSS EBIL EIB ELAK Contribution Contr
Slide 27: Focus Area 3: Geographical Expansion and Business Diversification
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 3: Geographical Expansion and Business Diversification Performance Trend - Banking Subsidiaries: Value creation and growth 27
Slide 28: Focus Area 4: Balance Sheet Efficiency, Optimization and Agility
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 4: Balance Sheet Efficiency, Optimization and Agility YoY Growth 28
Slide 29: Focus Area 5: Business Transformation - Innovation and Digitization
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 5: Business Transformation - Innovation and Digitization Digital business: Enabling transition from fixed cost to 3rd party variable cost channels and self-service platforms 29
Slide 30: Fintech Capabilities: Self-Service Channels
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 5: Business Transformation - Fintech Capabilities: Self-Service Channels 70% of our transactions value outside the branch Branches now handling high value transactions for SME, corporates, wealth management & advisory service
Slide 31: Innovation and Digitization: Migrating to Self-Service Channels
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 5: Business Transformation - Innovation and Digitization Migrating from fixed and variable cost channels to self-service channels 31
Slide 32: Fintech Capabilities: Data Strategy, Decision Science and Analytics
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 5: Business Transformation - Fintech Capabilities: Data Strategy, Decision Science and Analytics 87% of our Loan Transactions via Mobile Channel 32
Slide 33: Fintech Capabilities: Lifestyle Support
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 5: Business Transformation - Fintech Capabilities: Lifestyle Support Payments Processing Capabilities – Promoting a Cashless Economy 33
Slide 34: Fintech Capabilities: Compressing Time and Geography
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 5: Business Transformation - Fintech Capabilities: Compressing Time and Geography Remittances Processing 34
Slide 35: Fintech Capabilities: Global Presence
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 5: Business Transformation - Fintech Capabilities: Global Presence FX Trading – Enabling Global Trade 35
Slide 36: Focus Area 6: Asset Quality, Distribution and Risk Mitigation
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 6: Asset Quality, Distribution and Risk Mitigation Groups Public Sector MSME Retail Corp & Large Enterprises 36
Slide 37: Focus Area 6: Asset Quality, Distribution and Risk Mitigation
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 6: Asset Quality, Distribution and Risk Mitigation 37
Slide 38: Focus Area 7: Efficiency and Cost Optimization
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 7: Efficiency and Cost Optimization 38
Slide 39: Focus Area 7: Efficiency and Cost Optimization
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 7: Efficiency and Cost Optimization 39
Slide 40: Focus Area 7: Efficiency and Cost Optimization
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 7: Efficiency and Cost Optimization 40
Slide 41: Focus Area 7: Efficiency and Cost Optimization
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 7: Efficiency and Cost Optimization 41
Slide 42: Focus Area 7: Efficient Financial Intermediation
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 7: Efficient Financial Intermediation 42
Slide 43: Focus Area 8: Impact Investment
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 8: Impact Investment Impact & Social Investment Programs 43
Slide 44: Focus Area 8: Impact Investment
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Focus Area 8: Impact Investment Shared Prosperity Business Model and its Social Impact
Slide 45: Business Validation
Business Validation
Slide 46: Global Ratings and Accolades
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Global Ratings and Accolades 2023 2021 Equity Bank Credit Rating World’s strongest banking brands 2023 • Position 22nd in Africa; African Business Leadership Equity Bank Credit Rating • National Rating: B3 • Position 4 – in the World •
Slide 47: Global Ratings and Accolades
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Global Ratings and Accolades • Africa best bank for • Socially Responsible Bank in Dr. James Mwangi, • Bank of the Year - Kenya 2019 SMEs 2021 Africa, 2020 named to the 3rd Annual • Bank of the Year - Uganda 2019 & 2021 • Excellence in
Slide 48: 2023 National Banking Awards and Accolades
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE 2023 National Banking Awards and Accolades 2023 1. Best Overall Bank - 12 years running 2. Best Bank in Tier 1- 9 years running Brand 3. Most Customer-Centric Bank 4. Best Bank in Sustainable CSR - 1st Runners Up 5. Best Bank in ESG Fac
Slide 49: Global Ratings and Accolades
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Global Ratings and Accolades 2023 The Most Valuable and Strongest Banking Brands Equity Group, East, East and and Central Africa’s Africa’s largest largest financial financialservices servicesGroup, Group,has hasbeen beennamed named the
Slide 50: Global Ratings and Accolades
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Global Ratings and Accolades Equity Group’s MD and CEO, Dr. James Mwangi, was honoured in the 2019 Bloomberg 50 list. This is an honorary list of fifty innovators, entrepreneurs, and leaders who have impacted the global business landsca
Slide 51: Global Ratings and Accolades
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Global Ratings and Accolades Global Ratings and Accolades YOUR HEADLINE W I L L SI T H E R E 51
Slide 52: Global Ratings and Accolades
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Global Ratings and Accolades Equity Group Managing Director and Chief Executive Officer, Dr. James Mwangi was recognized and awarded the prestigious Lifetime Achievement Award at the All-Africa Business Leaders Awards held at Sun City,
Slide 53: The 2023 Kenya – DRC Investors' Roadshow
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE The 2023 Kenya – DRC Investors’ Roadshow Kenya Segment Equity Group hosted investors who participated in the Kenya and DRC Investors’ Roadshow aimed at unlocking business networks and fostering trade and investment opportunities in Keny
Slide 54: The 2023 Kenya – DRC Investors' Roadshow
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE The 2023 Kenya – DRC Investors’ Roadshow Kenya Segment (Continued) The Central Bank of Kenya Governor, Dr Kamau Thugge (left), Guests follow proceedings during the official opening of the 2023 Karen Kandie, Director of Parastatals Refor
Slide 55: The 2023 Kenya – DRC Investors' Roadshow
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE The 2023 Kenya – DRC Investors’ Roadshow DRC Segment Delegates arrive in Kinshasa and Lubumbashi for the DRC Segment of the 2023 Kenya – DRC Investors’ Roadshow. 55
Slide 56: The 2023 Kenya – DRC Investors' Roadshow
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE The 2023 Kenya – DRC Investors’ Roadshow DRC Segment (Continued) Kenya’s Ambassador to DRC, Amb. George Masafu gives remarks at the Equity Group Chairman Prof. Isaac Macharia (left) and Deputy Governor luncheon hosted by EquityBCDC duri
Slide 57: Market Validation
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Market Validation Market Capitalization as at 24th July 2022 Market Capitalization Source: Business Daily July 25, 2023 57
Slide 58: Intermediation and Financial Performance
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Intermediation and Financial Performance 58
Slide 59: Balance Sheet
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Balance Sheet KES Billion H1 2022 H1 2023 Growth Assets Cash & Cash Equivalents 214.4 219.8 3% Government Securities 365.0 485.6 33% Net Loans 650.6 817.2 26% Other Assets 103.9 122.2 18% Total Assets 1,333.9 1,644.8 23% Liabilities & C
Slide 60: Income Statement
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Income Statement KES Billion H1 2022 H1 2023 GROWTH Interest Income 55.0 69.8 27% Interest Expense 15.2 23.4 54% Net Interest Income 39.8 46.4 17% Non-Funded Income 25.0 35.7 42% Total Income 64.8 82.1 26% Loan Loss Provision 3.3 6.3 89
Slide 61: RoAE and RoAA Trend
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE RoAE and RoAA Trend RoAE RoAA 61
Slide 62: Financial Ratios
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Financial Ratios EBKL EBKL Group Group H1 2022 H1 2023 H1 2022 H1 2023 Profitability Yield on Loans 10.8% 11.8% 11.4% 11.9% Yield on Government Securities 10.0% 11.1% 10.0% 11.1% Yield on Interest Earning Assets 10.0% 11.3% 9.7% 10.7% C
Slide 63: 2023 Guidance Vs Actual - Group
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE 2023 Guidance Vs Actual - Group 2023 Guidance H1 2023 Actual Loan Growth 25% - 30% 26% Deposit Growth 20% - 25% 21% Net Interest Margin 7.5% - 8.5% 7.0% Non Funded Income Mix 40% - 43% 43.5% Cost to Income Ratio 40% - 45% 49.0% Return o
Slide 64: Macroeconomic Environment Indicators & Trends
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Macroeconomic Environment Indicators & Trends 64
Slide 65: Kenya: GDP growth vulnerable to tight policy
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE EVERYDAY Kenya: GDP growth vulnerable to tight policy Higher tax burden and interest rates may subdue growth O VER 15 M IL L I O N MEM BE RS AR E T R ANS FORM I N G •A griculture recovers. After contracting for five quarters, the agricu
Slide 66: Kenya: vulnerable external position
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Kenya: vulnerable external position Slowdown in foreign financial inflows • Foreign exchange reserves dropped below 4 months of import cover in January. However, the inflow of the World Bank loan in June put reserves back over 4 months.
Slide 67: DRC – GDP growth driven by the extractive economy
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE DRC – GDP growth driven by the extractive economy Growth in the extractive economy is stabilising • The DRC economy grew by a brisk 8.9% in 2022, on the back of the acceleration of the extractive sector’s growth to 22.6%. • An expansion
Slide 68: DRC – runaway inflation
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE DRC – runaway inflation Single digit inflation likely to be restored in 2024 • The Congolese franc has depreciated by almost 20% against the US dollar in the year to date, to CDF2,394/$1 on 3 July 2023, on the official market. Most of t
Slide 69: DRC – strong copper price
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE DRC – strong copper price Smaller current account deficit over medium term is positive for DRC’s external position 0 -1 -2 -3 -4 -5 -6 2019 2020 2021 2022E 2023E 2024E 2025E • The copper price is expected to remain strong over the mediu
Slide 70: Uganda: restoration of low inflation
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Uganda: restoration of low inflation Sharp and early rate hikes explain significant slowdown in inflation • The MPC increased the policy rate by 350bps in 2022, to 10.0%. • We see inflation in the low-to-mid-single-digits in 2024. • The
Slide 71: Rwanda: fastest growing of the economies Equity operates in
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Rwanda: fastest growing of the economies Equity operates in Tight policy may subdue growth Figure 28: Rwanda: real GDP growth, % YoY Figure 29: Rwanda: inflation and policy interest rate Urban inflation, % YoY Key repo rate, % 25 25 20.
Slide 72: Tanzania: pick up in GDP growth
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Tanzania: pick up in GDP growth Growth to increase to 7.0% over medium term • Tanzania’s economic growth is expected to pick up to 5.0-5.5% in 2023 by the IMF, owing to softer global commodity prices and an improvement in the domestic b
Slide 73: South Sudan: fall in oil production
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE South Sudan: fall in oil production GDP growth and current account also undermined by instability in Sudan • The oil sector – which accounts for 70% of GDP – saw production decrease from 170kbpd in FY2019/20 and is estimated to have ave
Slide 74: Case Studies
Case Studies The Equity business model is a leading case study in many business schools around the world. In addition, many business schools, organizations and institutions regularly visit the Group to learn firsthand about the brand, its evolution and business strategy. Many financial institutions
Slide 75: Equity Brand Campaign
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Equity Brand Campaign Today we celebrate over 15 Million Members empowered across 7 African markets to Learn, Grow, Dream, Create, Lead and Harvest. This is our One Equity spirit! Online: Click link below to view video on Equity’s celeb
Slide 76: Scan QR codes to download reports and plan
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Scan QR code below to download the Equity Group Scan QR code below to download the Africa Holdings Plc 2022 Integrated Report and Financial Recovery and Resilience Plan Statements Scan QR code below to view video: Reflections on how the
Slide 77: Notes
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Notes 77
Slide 78: Notes
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Notes 78
Slide 79: Equity Centre - EquityBCDC Le Siège Social, Kinshasa
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Equity Centre - EquityBCDC Le Siège Social, Kinshasa 79
Slide 80: Equity Centre, Nairobi contact details
Equity Group Holdings Plc Investor Briefing H1 2023 PERFORMANCE Equity Centre P.O. Box 75104–00200, Nairobi. Tel: 0763063000, Fax: + 254-020-2737276, info@equitygroupholdings.com, www.equitygroupholdings.com Equity Centre, 9th Floor, @keEquityBank UpperHill keEquityBank P.O.Box 75104, Nairobi, Tel:
Equity Group Holdings — H1 2023 Earnings Presentation on 6ix