EQUITY : 2023 HALF YEAR RESULTS OF KSHS.26.3 BILLION PROFIT AFTER TAX

PRESS RELEASE

EQUITY GROUP HOLDINGS 2023 HALF YEAR RESULTS OF KSHS.26.3 BILLION PROFIT AFTER TAX

• Growth In Assets Of 23% To Reach Kshs.1.645 trillion.
• Net Loans Register 26% Growth
• Subsidiaries Contribute 46% Total Assets And 45% Profit Before Tax
• 27.7% Return on Equity

August 15th 2023……Amidst a tough operating global macro environment characterized by

stubbornly sticky high inflation, high interest rates, volatile exchange rates and devaluation of emerging economies currencies, Equity Group has announced 2023 half year results that reflect resilience. The Group registered a funding growth of 23% driven by 21% growth in customer deposits and 29% growth in shareholders' funds as a result of recovery of mark-to- market losses on Eurobonds. Net loans to customers registered a growth of 26% while investments in government securities grew by 33%. Yields on investment in government securities increased to 11.1% up from 10.1% while yields on loans increased to 11.9% up from 11.4%. Cost of deposits rose to 2.9% up from 2.3% driving cost of funding to 3.7% up from 2.8% generating a profit after tax of 9%, reflecting the volatility in the operating microenvironment.

While releasing the half year financial results, the Group Managing Director, and CEO Dr. James Mwangi said "Our strategic pursuit has resiliently positioned us to weather the macroeconomic headwinds and turbulence. Regional geographical expansion and business diversification has seen reliance on contribution of the Kenyan banking subsidiary reduced with other subsidiaries contributing 46% total assets and 45% of Profit Before Tax, driven primarily by insurance and the DRC business. The drive to non-funded income growth registered good success with total income growing at 24% driven by a 42% growth of non-funded income and 17% growth of net interest income." He added, "Gross trade finance revenue grew by 117% with trade finance related lending growing by 46%, FX total income grew by 68% and diaspora flows grew by 146% to account for 12% of all client FX volumes."

A defensive strategy saw liquidity ratio remain strong at 51.1% while capital ratios remained strong at 15.1% and 19% for core capital to risk weighted assets and total capital to risk weighted assets respectively. Despite the challenging macro and micro economic environment, focus on asset quality management saw the Group register an NPL ratio of 9.8% against an industry average of 14.9%. Prudent management saw growth in cost of credit risk 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 skilled and experienced executives to match the capabilities and competencies to the challenges of growth. Staff costs registered a growth of 32% while other operating costs grew by 33%.

East Africa has remained the fastest growing region in the world. The regional governments are focused on fiscal consolidation with budget deficit reductions. Given Equity Group's offensive strategy of focusing on payments, trade finance, FX business among other non-funded income

while strengthening efficiency through digitization and defensive approach to liquidity, capital and asset quality buffers, the Group continued to deliver on its stated financial outlook. Profit After Tax stood at Kshs.26.3 billion reflecting a Return on Equity of 27.7% and a Return on Assets of 3.5%. "We are confident Equity Group is strategically positioned as a regional systemic bank among the top 3 in 5 of its 6 operating countries to support further integration and increased cross border trade under the African Continental Free Trade Area while supporting the region to remain the fastest growing common market in the world to offer opportunity for long term sustained value creation" added Dr. Mwangi.

ENDS