Genghis Capital - EQUITY BANK (EQTY) Equity Group Holdings Plc (NSE: EQTY) 1H20 Earnings Note

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Genghis Capital

Gerald Muriuki

Equity Group Holdings Plc (NSE: EQTY) 1H20 Earnings Note

Equity Group Holdings Plc (NSE: EQTY) reported 24.4% y/y dip in 1H20 Earnings Per Share (EPS) to KES 2.41 (KES 2.44 expected) on the back of substantial increase in loan loss provisions (773.4% y/y) to KES 8.0Bn. Net interest income (NII) rose 16.9% y/y to KES 24.6Bn (interest income from loans and government securities rose 20.8% y/y and 14.8% y/y, respectively) while non-interest revenue (NIR) dipped 13.0% y/y to KES 14.4Bn. Consequently, NIR contribution dropped 708bps y/y to 36.9%. The loan book grew 22.0% y/y to KES 391.6Bn, customer deposits up 18.6% y/y while government securities rose 20.5% y/y to KES 216.4Bn. Against current market price, the bank trades at attractive P/B of 0.8x. We maintain our LONG-TERM BUY recommendation on EQTY at a target price of KES 43.66.

18/08/2020 4 EN

Underlying

EQUITY BANK

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KE0000000554 Nairobi Securities Exchange Kenya

Provider

Genghis Capital

Genghis Capital is an innovative and customer focused Investment Bank licensed by the Capital Markets Authority (CMA). Founded in 2008, Genghis is one of the leading investment banks in Kenya. Since its establishment, Genghis has achieved tremendous growth to offer a well-diversified portfolio of financial services that includes:

i. Securities(Equity/Debt) Trading
ii. Research
iii. Wealth Management services
iv. Investment Advisory & Management via the GenCap Unit Trusts
v. Corporate Finance & Transaction Advisory services

The Kenyan Capital Markets continue to develop in size, scope and sophistication. With this is an increasing demand for more specialized and personalized brokerage service and we at Genghis Capital are glad to be able to offer you this service. Our strength lies in ensuring our clients are up to speed with developments at the stock market and the economy. Research and technology remains our competitive and comparative advantage hence Experience, Expertise and Professionalism are some of the qualities you can expect from our team.

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Analysts

Gerald Muriuki

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Equity Group Holdings Plc (NSE: EQTY) 1H20 Earnings Note

Equity Metals Corporation (TSXV: EQTY / OTCQB: EQMEF) – Drilling Expands Resources by at Least 30%

Equity Metals Corporation (TSXV: EQTY / OTCQB: EQMEF) – Reaches Milestone of 1 Moz Gold Equivalent Resource

Stocks Should Rally If Tomorrow’s Inflation Report Shows This

Genghis Cross-Asset Weekly Strategy - 8th February 2021

East African Breweries Ltd (NSE: EABL) 1H21 Earnings Note

KenGen Company Plc (NSE: KEGN) FY20 Earnings Note

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