Genghis Capital - EQUITY BANK (EQTY) Equity Group Holdings Plc (NSE: EQTY) 3Q20 Earnings Note

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Genghis Capital

Gerald Muriuki

Equity Group Holdings Plc (NSE: EQTY) 3Q20 Earnings Note

Equity Group Holdings Plc (NSE: EQTY) reported 13.9% y/y dip in 3Q20 Earnings Per Share (EPS) to KES 3.99 on the back of substantial increase in loan loss provisions (686.1% y/y) to KES 14.8Bn. Net interest income (NII) rose 21.8% y/y to KES 39.3Bn (interest income from loans and government securities rose 24.2% y/y and 22.2% y/y, respectively) while non-interest revenue (NIR) grew 10.1% y/y to KES 24.8Bn. Consequently, NIR contribution dropped 242bps y/y to 38.7%. On the back of full consolidation of BCDC bank Congo in August, the loan book grew 30.1% y/y to KES 453.9Bn, customer deposits up 44.5% y/y while government securities rose 34.4% y/y to KES 222.8Bn. We are currently reviewing our banking sector coverage amidst the significant and higher than expected increase in provisioning levels ahead of our Playbook 2021. However, against historical averages, current trading metrics (P/B 1.0x and P/E 6.7x) offer opportunity for long-term investors.

13/11/2020 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) 3Q20 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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