INVESTOR BRIEFING FULL YEAR 2020 PERFORMANCE

Equity Group's Philosophies

Our Purpose:

Transforming lives, giving dignity and expanding opportunities for wealth creation

Our Mission:

We offer integrated financial services that socially and economically empower consumers, businesses and communities

Our Vision:

To be the champion of the socio-economic prosperity of the people of Africa

Our Core Values:Positioning Statement:

We provide inclusive financial services that transform livelihoods, give dignity and expand opportunities

Integrity

Teamwork

Respect and Dignity for the Customer

Effective Corporate

Professionalism

Creativity & Innovation

Unity of Purpose

Governance

Governance and Organizational Structure

Group Executive Management

Dr.James Mwangi,CBS

Mary Wamae

Polycarp Igathe

OlanrDeawviadjuNBgamtaisebi

Group Managing Director &

Group Executive Director

Group Chief Commercial

GGrroouupp CFhinieafnIcnefoDrimreacttiorn

Chief Executive Officer

Officer

Officer

Secretary

Sam Gitwekere

Group Director Credit Risk

James Mutuku

Group Director, Treasury and Trade Finance

Christine Browne

Group Director Legal Services and Company

Elizabeth Gathai

Director Digitization and

Automation

Brent Malahay

Group Director Strategy, Strategic Partnerships and

Investor Relations

Joy DiBenedetto

Group Director Communications

David Ngata

Group Finance Director

Bildard Fwamba

Chief Internal Auditor

Group Executive Management

Gerald Warui

Managing Director, Equity Bank Kenya

Emmanuel Deh

Executive Director, Equity

Bank Kenya

Samuel Kirubi

Managing Director, Equity Bank Uganda

Anthony Kituuka

Executive Director, Equity Bank Uganda

Addis Ababa Othow

Managing Director, Equity Bank South Sudan

Hannington Namara

Managing Director, Equity Bank Rwanda

Robert Kiboti

Managing Director, Equity Bank Tanzania

Esther Kitoka

Executive Director, Equity Bank Tanzania

EquityBCDC S.A.

Célestin Muntuabu

Managing Director,

Jean-Claude Tshipama

Deputy Managing Director,

EquityBCDC S.A

Group Board of Directors

Prof. Isaac Macharia

Non-Executive Chairman

Dr. James Mwangi

Managing Director and Chief Executive Officer

Dr. Edward Odundo

Non-Executive Director

Evelyn Rutagwenda

Non-Executive Director

Dr. Helen Gichohi

Non-Executive Director

Christopher Newson

Non-Executive Director

Mary Wamae

Executive Director

Vijay Gidoomal

Non-Executive Director

Christine Browne

Company Secretary

The Great Multi Crises - COVID-19

Global Health crisis

  • • December 16, 2019 - A new virus, COVID-19, detected in Wuhan, China and spread rapidly across the globe in 2020

  • • November 9, 2020 - COVID-19 vaccines announced. Currently more than 50 COVID-19 vaccine candidates are in trials q COVAX to distribute 2 Billion vaccines globally by end of 2021

    q

    8.3 Million people already fully vaccinated worldwide

  • • December 14, 2020 - New COVID-19 variants reported in the UK and later December 18 in South Africa fuelling a second wave which is said to be more contagious.

  • • Cases reported as at March 5, 2021 q Global; 116 Million Cases, 2.6 Million deaths q Africa; 3.9 Million Cases, 105 thousand deaths

Source: John Hopkins, Africa CDC & WHO

Humanitarian crisis

IMF - Approximately 107 million people will fall below the poverty line by 2021 due to COVID-19

World Food Programme estimates that 271.8 million people are acutely food insecure or directly at risk of becoming so due to the aggravating e ect of the COVID-19

World Data Lab - The World has lost 5 years in its e orts to end extreme poverty because of COVID-19

World Health Organisaon - 45% of the countries in the world have postponed at least 1 vaccination campaign due to COVID-19

$ Global Economic crisis

2021 GDP Growth forecasts opmisc aſter vaccinaons begin;

Significant job losses predicted

  • • Global GDP growth expected at 5.5%

  • • Advanced economies expected GDP growth at 4.3%

    • • ILO projects a continued loss in working hours of 3.0 per cent in 2021 relative to the fourth quarter of 2019, which corresponds to90 million full-time equivalent (FTE) jobs.

  • • Emerging and developing economies expected growth at 6.3%

  • • Sub-Saharan Africa expected GDP growth at 3.2%

  • • In 2020, 8.8 per cent of global working hours were lost relative to the fourth quarter of 2019, equivalent to 255 million full-time jobs

Source: IMF

Source: International Labour Organisation (ILO)

COVID-19 Management and Responses

Key government and banks' regulator intervenons across the region

  • • Encouraged nancial institutions to accommodate loan restructuring for their clients

  • • Promotion of the use of e-payments to reduce risk of contaminated bank notes

  • • Reduced the Cash Reserve Ratio (CRR) to boost banks' liquidity

  • • Enacted legislations aimed at giving relief to a ected populations e.g. tax reliefs

  • • Drawn FY2020/21 budgets aiming to support recovery of critical sectors

Regional COVID-19 Financial Assistance

(Rapid Financing Instrument) from

IMF

Country

Amount Approved

Date of Approval

DRC

US$ 363 million

April 22, 2020

Kenya

US$ 739 million

May 6, 2020

Rwanda

US$ 220 million

April 2 & June 11, 2020

South Sudan

US$ 52 million

Nov 11, 2020

Uganda

US$ 492 million

May 6, 2020

Regional CBR and Currency Depreciation

Regional CBRRegional

Currency Depreciaon to

USD

Dec-19

1,685.0 14.0%

Dec-19

Dec-20

101.4 8.3%

Kenya

109.3 7.0%

Uganda

3,664.3 9.0%

3,660.1 7.0%

KES

UGXTanzania

2,298.0 7.0%

2,321.5 7.0%

Rwanda

923.0 5.0%

972.5 4.5%

DRC

1,964.7 18.5%

South Sudan

260.0 15.0%

533.0 15.0%

TZS

RWF

CDF

SSP

GDP Growth Projected to improve across the Region

Source: IMF & CBK

Equity Boosts Government Efforts against COVID-19 Pandemic

Kes 4.1 billion to complement Government's health and social responses as well as support our customers

Health Response

Social Response

Loan restructuring

Capital bu ers

Risk management

Liquidity bu ers

Waived fees on

Equity Group

In response to the

In response to the

In response to a

In response to the

mobile banking

Foundation,

challenging operating

global and regional

challenging

potential liquidity

transactions to

Mastercard

environment for

uncertain operating

operating outlook

risk arising from

discourage use of

Foundation and

customers, we have

environment, we

we partnered with

accommodation of

cash and leveraged

Dr. James Mwangi

identi ed borrowers

have enhanced

development

our customers and

o our health clinics

family

impacted by COVID-19

core capital bu ers

institutions to

the challenging

to support

contribution to

who account for 32%

by withdrawal of

obtain partial credit

environment, the

educational

the COVID-19 fund

of our loan portfolio.

2019 dividend

guarantee on select

Group secured DFI

awareness.

totalling Kes 1.7

Loan restructuring

amounting to Kshs

borrowers and

funding amounting

Transaction fee

Billion

fees waived

9.5 Billion and

enhanced our

to USD 350m in the

foregone amounted

amounted to Kes 1.2

raised USD 100

provisioning

year to strengthen

to Kes 1.2 billion.

billion.

million of Tier 2

intensity to

liquidity; liquidity

capital

proactively manage

levels now rising to

emerging risks

59% from 52%

Equity Bank Business Model and Strategy Focus

1.

2.

Non-Funded Income GrowthTreasury

3.

Geographical and Business Diversification

4.

Balance Sheet Agility

5.

6.

7.

8.

Innovation and DigitizationAsset QualityEfficiency and Cost OptimizationImpact Investment & Social Brand Development

Focus Area 1: Non-Funded Income Growth

Kes Billion

Focus Area 1: NFI Contribution

Focus Area 2: Treasury

KES Billion

WILL SIT HERE30.7

Note: Income calculation above is before funding costs

Focus Area 3: Subsidiaries Performance and Contribution

Kes Billion

Focus Area 3: Geographical and Business Diversification

Ratios-Banking Subsidiaries

Subsidiary

FY 2019

FY 2020

Subsidiary

FY 2019

FY 2020

EBKL

28.7%

17.9%

EBKL

4.0%

2.4%

EBUL

19.0%

22.0%

EBUL

2.6%

3.1%

EBRL

24.9%

22.0%

EBRL

3.6%

3.4%

EBTL

-13.1%

-7.9%

EBTL

-1.3%

-1.1%

EquityBCDC

17.0%

8.8%

EquityBCDC

1.8%

0.8%

EBSSL

14.4%

10.6%

EBSSL

5.4%

9.3%

Cost-to-Assets Ratio

Cost-to-Income Ratio

Subsidiary

FY 2019

FY 2020

Subsidiary

FY 2019

FY 2020

EBKL

4.6%

4.5%

EBKL

46.4%

41.5%

EBUL

6.4%

7.5%

EBUL

60.5%

56.5%

EBRL

4.8%

5.7%

EBRL

48.5%

49.6%

EBTL

6.9%

6.4%

EBTL

109.3%

72.1%

EquityBCDC

7.0%

6.2%

EquityBCDC

72.3%

79.2%

EBSSL

12.2%

13.4%

EBSSL

65.0%

52.1%

Focus Area 3: Geographical and Business Diversification

  • • Present in 6 countries and a commercial representative o ce in Ethiopia

  • • We are a Top 2 bank in our two largest markets

    YOUR WILL

    and in the Top 10 in three other markets

  • • Population of ~367 Million

  • • Nominal GDP of ~USD 314 Bn

  • • BCDC acquisition completed on 7 August 2020. EBC and BCDC operations merged e ective 31 December 2020 to create Equity BCDC

  • • BCDC contributed 200,000 customers and 26 branches to our DRC operations

Focus Area 3: Geographical and Business Diversification

BRANCHES

336

CAPITAL CITY

124

Branches in Kenya

190

Nairobi

52

Branches in Uganda

43

Kampala

21

Branches in S. Sudan

5

Juba

4

Branches in Tanzania

14

Dar es Salaam

1

Branches in Rwanda

14

Kigali

8

Branches in DRC

70

Kinshasa

38

AGENT OUTLETS

53, 151

34, 862

725

POINT OF SALE TERMINALS (POS) ATM

Focus Area 4: Balance Sheet Resilience and Agility

KES Billion

Funding Split

Asset Split

Focus Area 5: Innovation and Digitization

Transformation from a place you go to; to something you do. Digitized Banking - Moving from xed cost to variable cost

Focus Area 5: Innovation and Digitization

Transformation from a place you go to; to something you do. Digitized Banking - Moving from xed cost to variable cost

Focus Area 5: Innovation and Digitization

Transformation from a place you go to; to something you do. Digitized Banking - Moving from fixed cost to variable cost

Transaction numbers in millions

345

70

65

775

770

590

85 80

25 20

10

5

0

FY 2013

FY 2015

1.3

2.0

FY 2014

FY 2016

FY 2017

770.5

Mobile and internet banking

75.7 Agency

27.9

Merchants & Eazzypay & Eazzybiz

20.8

17.7

ATM Branch

FY 2018

FY 2019

FY 2020

Focus Area 5: Innovation and Digitization

Migrating from Fixed to Variable Cost Delivery Infrastructure

Variable cost channels

Fixed cost channels

+54%

Transaction numbers in millions

+2%

495.9

267.7 274.0

-13%

*

321.5

87.1

-23%

-26%

+21%

+78%

+56%

+97%

75.7

-17%

27.0

24.0

20.8

17.7

3.5

2.9

3.5

0.6

23.1

5.3

0.4

19.2

2.0

2.7

FY 2019

FY 2020

FY FY 2019 2020

FYFYFYFY

2019 2020

2019 2020

FY FY 2019 2020

FY FY 2019 2020

FYFYFY FY 2019 2020

FYFY

2019 2020

FY FY 2019 2020

2019 2020

Equitel

EazzyApp

Eazzy Fx

EazzyBizEazzyPay

EazzyNet

Agency

Merchants

ATM

Branch

-19%

Transaction value in KES billion

2,422.9

+16%

+50%

-17%

1,969.1

+58%

799.9 929.3

291.0 242.6

934.2

-23%

+77%

622.9

+158%

713.8

+88%

+80%

118.9

169.9 299.9

452.1

33.6

15.3 28.8

18.9

13.0

10.5

FYFY

2019 2020

FY FY 2019 2020

FY 2019

FY 2020

FYFY

2019 2020

FY FY 2019 2020

FY FY 2019 2020

FY FY 2019 2020

* Eazzy Fx transaction numbers in thousands

92.0

FY

FY

FY

FY

FY

FY

2019

2020

2019

2020

2019

2020

Focus Area 5: Fintech Innovation and Digitization

98% of our Transactions outside the branch

Focus Area 5: Fintech Innovation and Digitization

60 % of our Transactions Value outside the branch

Branches now handling high value transactions for SME, corporates, wealth management & advisory services

Focus Area 5: Fintech Innovation and Digitization

91% of our Loan Transactions via Mobile Channel

FY 2020 Transaction count

FY 2020 Transaction value

Mobile Lending

Branch Lending

Focus Area 5: Fintech Innovations in Digital Payments

Steady adoption of Eazzy banking solutions

Focus Area 5: Fintech Innovations in Diaspora Remittances

+104%

279.4

136.9

1.5

+76%

0.9

FY 2019

FY 2020

Transaction Volumes in Kes BnDiaspora Commissions in Kes Bn

Focus Area 5: Fintech Innovations in Fx Trading

Kes Billion

  • • The diaspora ows account for

32% of all client Fx volumes

HEADLINILL SIT HERE

+51%

863.2

570.5

583.8

(68%)

Other FX

433.6

Flows

(76%)

279.4

(32%)

Diaspora

136.9

Flows

(24%)

FY 2019

FY 2020

E

Fx Trading Income

+77%

6.2

3.5

FY 2019

FY 2020

YOUR

Focus Area 6: Asset Quality

Focus Area 6: Asset Quality

NPL per sector as at December 2020

Focus Area 6: Asset Quality

v Contribution to total provisions as at December 2020

Coverage and provisions as at December 2020

Stage 1 8%

Stage 2

25%

67%

Stage 3

52.3

34.9

13.0

89.4%

4.4

59.7%

Provisions

(Kes Bn)

16.6%

1.1%

Coverage

(%)

Stage 1

Stage 2

Stage 3

Total

Focus Area 6: Asset Quality

As part of the Group's commitment to support lives and livelihoods and keeping the lights of the economy on, the Group accommodated Kes 171 billion of loans. The group's gross loan book is Kes 530 billion, so this represents 32% of the loan portfolio. However, as at the end of the year, Kes 40 billion had resumed repayment and Kes 9 billion had been downgraded to NPL (Stage 3).

Kes 122 billion therefore remains under moratorium constituting 23% of the loan book analysed as below:

Focus Area 7: Efficiency and Cost Optimization

Kes Billion

Other Expenses Trend

Cost to Income Ratio

(Without Loan Loss Provision)

Cost to Assets Ratio

(Without Loan Loss Provision)

EBKL

16.6

16.5

15.7

FY 2018

FY 2019

FY 2020

Group

29.7

25.4

23.4

FY 2018

FY 2019

FY 2020

EBKL

47.8%

46.4% 41.5%FY 2018

FY 2019

FY 2020

Group

52.4%

51.1%

48.5%FY 2018

FY 2019

FY 2020

EBKL

5.6% 4.6%

4.5%FY 2018

FY 2019

FY 2020

Group

6.5%

6.3% 5.7%FY 2018

FY 2019

FY 2020

Focus Area 7: Efficiency and Cost Optimization

Group

Net Interest Margin

Focus Area 7: Efficient Financial Intermediation

Equity Group's lending yields compared to Kenyan Tier 1 Banks. Lending yields reflecting efficient asset allocation between asset classes

4.0

3.5

Equity Group's ability to attract cheap deposits underpinned by its stable deposit franchise and implied low risk

3.0

Tier 1 Banks Cost of Funds Equity Cost of Funds

2.5

Tier 1 Banks Cost of Deposits Equity Cost of Deposits

Q3 2018

Q4 2018

Q1 2019

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Tier 1 Banks excludes Equity Group. Industry data available up toQ4 2020 for Banks that have published their results as at 26th March 2021.

Focus Area 8: Efficient Financial Intermediation

Impact & Social Investment Programs

USD 465 M in Social Investment Programs

Focus Area 8: Impact Investment

Shared Prosperity Business Model and its Social Impact

Business Validation

Global Ratings and Accolades

Equity Bank Credit Rating

  • • National Rating: B2

  • • Global Rating: Aaa.ke/KE-1

  • • Rating Outlook: Negative

Same as the sovereign rating

  • • Position 20 globally on Return on Assets

  • • Position 62 globally on Soundness (Capital Assets Ratio)

    2020 Oslo Business for Peace Award Dr. James Mwangi.

  • • Position 55 globally on Profits on Capital

    AFRICAN BANKS 2020

    • • Position 7 overall

    • • Position 5 on soundness

    • • Position 9 on growth performance

    • • Position 8 on return on risk

    • • Position 6 on leverage category

  • • Position 754 largest bank globally

  • • Position 6 on profitability

    Africa's SME Bank of the Year, 2018, 2019 & 2020

    African Business Leadership Awards 2020

    • • African CEO of the Year - Dr. James MwangiAfrica's top 150 most valuable brands

    • • Position 2 - in Kenya

    • • Position 69 - in Africa

    2020

    Equity Bank Credit Rating

    • • Long Term Rating: AA-

    • • Short Term Rating: A1

  • • Best Bank in Africa

  • • Best Digital Bank in Africa

  • • Excellence in Leadership in Africa

  • • Rating Outlook: Negative

Global Ratings and Accolades

  • • Socially Responsible Bank in Africa, 2020

  • • Best Regional Bank - East Africa - Equity Bank 2020

  • • African Bank of the Year, 2018

  • • African Banker of the Year, 2018 (Dr. James Mwangi)

  • • Best Retail Bank in Africa, 2017

Equity Bank has been recognised for the last 13 Years since 2007 as the Top Banking Superbrand in Kenya.

Bank of the Year 2019 & 2020

  • • Bank of the Year- Kenya 2019

  • • Bank of the Year - Uganda 2019

  • • Bank of the Year - Rwanda 2020

  • • Bank of the Year - DRC 2020

  • • Bank of the Year- South Sudan 2019 & 2020

Customer Satisfactory Survey 2020

  • • Best Tier 1 (3rd place) - Customer Responsiveness and Satisfactory Digital Experience

Top Acquirer 2019 Award

  • • EABC Chairman's Award - Overall Best Regional Company, 2018

  • • Best East African Company - CSR, 2018

  • • Best East African Company - Financial services, 2018 (1st Runners up)

Dr. James Mwangi, named to the 3rd Annual 2019 Bloomberg 50 list

  • • Best Overall Winner - 1st Runners Up

  • • Most Innovative Bank - Winner

  • • Best in Sustainable Finance - 2nd Runners Up

2020 National Banking Awards and Accolades

Brand

  • 1. Best Overall Bank - 9 years running

  • 2. Best Bank in Tier 1 - 6 years running

  • 3. Best Bank in Sustainable CSR - 4 years running

  • 4. Most customer-centric bank - 3 years running

  • 5. Bank with the lowest charge for individuals - 4 years running

Franchise Segment

  • 1. Best Bank in SME Banking - 2 years running

  • 2. Best Bank in Retail

  • 3. Best Bank in Agency Banking - 6 years running

  • 4. Best Bank in Mobile Banking- 3 years running

  • 5. Best Commercial Bank in Microfinance - 6 years running

  • 6. Best Bank in Internet Banking - 1st Runner Up

  • 7. Best Bank in Corporate Banking - 1st Runner Up

  • 8. Bank with the lowest charge for loans - 1st Runner Up

Product

  • 1. Best Bank in Mortgage Finance

  • 2. Best Bank in Agriculture and Livestock Financing - 2 years running

  • 3. Special Judges Award for Product Innovation - Elimu Scholarship

  • 4. Best Bank in Product Marketing - 1st Runner Up

  • 5. Best Bank in Product Innovation - 1st Runner Up

  • 6. Best Bank in Trade Finance - 1st Runner Up - 3 years running

Leadership

  • 1. CEO of the Year - Dr. James Mwangi - 4 years running

  • 2. Corporate Banker of the Year - Moses Ndirangu

  • 3. Outstanding Young Banker - Dennis Maranga

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 landscape in measurable ways. Dr. Mwangi was lauded for his contribution in steering Equity Bank to have presence in the greater Central and Southern Africa region. He was honored alongside environmental activist Greta Thunberg, New Zealand Prime Minister Jacinda Ardern, CNN President and Warner Media Chairman Jeff Zucker, Singer and entrepreneur Rihanna, among others.

Global Ratings and Accolades

Dr. James Mwangi honouree,

2020 Oslo Business for Peace Award

Honourees are chosen by a prestigious Award committee consisting of past Nobel Prize winners in Peace Economics.

"Dr. James Mwangi receives the Award for his businessworthy values in championing financial inclusion for all in East and Central Africa. Dr. Mwangi helped achieve a social revolution by bringing banking services to people who previously had limited access to them bolstering Kenya's GDP. Dr. Mwangi is an exceptional entrepreneur and humanitarian. The committee sees him as a shinning example of how business leaders can accelerate change and help solve the world's problems," said Per Saxegaard, Founder of the Oslo Business for Peace Awards.

Market Validation

Kes Billion

Source: Business Daily January 5SthouanrcdeM:aBrcuhs2i5ntehs2s02D1 aily January 5th 2021 and March 25th 2021

Balance Sheet

KES Billion

FY 2019

FY 2020

Growth

Assets

Cash & Cash Equivalents

86.4

247.1

186%

Government Securies

172.2

217.4

26%

Net Loans

366.4

477.8

30%

Other Assets

48.7

72.8

50%

Total Assets

673.7

1,015.1

51%

Liabilies & Capital

Deposits

482.8

740.8

53%

Borrowed Funds

56.7

97.1

71%

Other Liabilies

22.4

38.6

72%

Shareholders' Funds

111.8

138.6

24%

Total Liabilies & Capital

673.7

1,015.1

51%

Income Statement

KES Billion

FY 2019

Growth

24%

14.7

18.7

26%

45.0

55.1

23%

37.8

27%

92.9

24%

25.9

496%

15.4

20%

29.7

17%

71.0

67%

0.9

24%

1.2

100%

22.2

-30

2.1

-77

20.1

-11%

5.2

-12%

FY 2020

26.6

0.7

25.9

59.7

FY 2020

Interest Income Interest Expense Net Interest Income

HEADLINE73.8

WILL SIT HERE

Non-Funded Income Total Income

29.8

74.8

*Loan Loss Provision Staff Costs

4.3

12.8

Other Operating Expenses Total Costs

25.4

42.5

Net Loss on Monetary Assets Gain on bargain purchase PBT

0.8

-

31.5

Tax PAT

8.9

22.6

Earnings per share

5.9

*Loan loss provision has been presented net of recoveries. In the CBK publication Loan Loss Provision is presented as a gross amount. The gross provisions and recoveries are as follows;

RoAE and RoAA Trend

Financial Ratios

EBKL

EBKL

Group

Group

FY 2019

FY 2020

FY 2019

FY 2020

Profitability

Interest Yield from Loans & Advances

11.6%

11.6%

12.6%

12.4%

Interest Yield from Gov't Securities

10.2%

10.9%

10.1%

10.7%

Yield from Earning Assets

11.0%

10.3%

11.2%

10.0%

Cost of Deposits

2.2%

2.4%

2.4%

2.3%

Cost of Funds

2.8%

2.8%

2.9%

2.8%

Net Interest Margin

8.2%

7.5%

8.3%

7.2%

Cost to Income Ratio with Provisions

52.2%

77.5%

57.0%

76.4%

Cost to Income Ratio without Provisions

46.4%

41.5%

51.1%

48.5%

Return on Average Equity

28.7%

17.9%

21.8%

15.3%

Return on Average Assets

4.0%

2.4%

3.6%

2.3%

Asset Quality

PAR

8.1%

11.5%

9.0%

11.0%

NPL Coverage

72.1%

99.4%

66.0%

89.4%

Cost of Risk

1.3%

7.9%

1.3%

6.1%

Leverage

Loan / Deposit Ratio

72.7%

63.0%

75.9%

64.5%

Capital Adequacy Ratios

Core Capital to Risk Weighted Assets

13.1%

12.4%

16.3%

14.8%

Total Capital to Risk Weighted Assets

17.4%

16.2%

19.8%

18.9%

Liquidity

Liquidity ratio

54.7%

73.1%

52.1%

59.3%

2021 Outlook - Group

2021 Outlook

FY 2020 Actual

Loan Growth

25% - 30%

30%

Deposit Growth

20% - 25%

53%

Net Interest Margin

7.0% - 8.0%

7.2%

Non Funded Income Mix

38% - 43%

41%

Cost to Income Ratio

40% - 45%

48.5%

Return on Equity

22% - 27%

15.3%

Return on Assets

3.0% - 4.0%

2.3%

Cost of Risk

2.0% - 3.0%

6.1%

NPL

7% - 10%

11.0%

Subsidiaries Contribution (Assets)

40% - 45%

39%

Subsidiaries Contribution (PBT)

25% - 30%

34%

Indicators & Trends - Kenya

Macroeconomic Environment - Kenya

8.00%

6.00%

4.00%

2.00%

0.00%

-2.00%

-4.00%

-6.00%

§ QUARTERLY GDP GROWTH - The IMF projects the economy to grow by 4.7% in 2021 but still faces signi cant risks, including the uncertainty around the length and severity of the pandemic, unpredictable weather conditions and the pace of the global economic recovery.

112 110 108 106 104 102 100

§

USD/KES - It is expected that the shilling may weaken in the short term to medium term as the Kenyan economy continues to recover from the e ects of the COVID-19 and the global economic slowdown.

3-Dec-19 31-Dec-19 28-Jan-20 25-Feb-20 24-Mar-20 21-Apr-20 19-May-20 16-Jun-20 14-Jul-20 11-Aug-20 8-Sep-20 6-Oct-20

3-Nov-20

1-Dec-20 29-Dec-20

Source: CBK Rates, foreign exchange rates and the Kenya National Bureau of Statistics, Quarterly GDP rates, IMF.

Macroeconomic Environment - Kenya (continued)

8.00

7.00

6.00

5.00

4.00

3.00

2.00

1.00

3-Dec-19

31-Dec-19

28-Jan-20

25-Feb-20

24-Mar-20

21-Apr-20

19-May-20

16-Jun-20

14-Jul-20

11-Aug-20

8-Sep-20

6-Oct-20

3-Nov-20

10.00

9.50

9.00

8.50

8.00

7.50

7.00

6.50

6.00

5.50

3-Dec-19

31-Dec-19

28-Jan-20

25-Feb-20

24-Mar-20

21-Apr-20

19-May-20

16-Jun-20

14-Jul-20

11-Aug-20

8-Sep-20

6-Oct-20

3-Nov-20

1-Dec-20 1-Dec-20

29-Dec-20 29-Dec-20

  • § Interbank Rates - Government payments and Commercial bank's excess reserves continued to ensure that the market remained liquid

  • § T-Bill Rates - Interest rates seen to be gradually rising across the tenors

91 Day182 Day364 Day

Source: CBK Statistics, Rates, Interbank rates and Treasury rates.

Macroeconomic Environment - Kenya (continued)

6.50

6.00

5.50

5.00

4.50

4.00

Dec-19

Jan-20

Feb-20

Mar-20

Apr-20

May-20

Jun-20

Jul-20

Aug-20

Sep-20

Oct-20

Nov-20

Dec-20

§ Inflaon - In ation has been on an upward trajectory from Q3 2020. It edged up slightly to close at 5.62% in Q4 2020 on account of a month-to-month food and non alcoholic drinks index increasing due to an increase in prices of particular food items.

10,000

9,500

9,000

8,500

8,000

7,500

5-Dec-19 2-Jan-20 30-Jan-20 27-Feb-20 26-Mar-20 23-Apr-20 21-May-20 18-Jun-20 16-Jul-20 13-Aug-20 10-Sep-20 8-Oct-20

5-Nov-20

3-Dec-20 31-Dec-20

FX Reserves

Months of

(USD Mio)

Import Cover

6.00

5.50

§

FX Reserves - Seen a drop on the FX

5.00

reserves from Q2 2020 as the Central bank

4.50

tries to cushion the local currency from

4.00

uctuations.

Source: CBK Weekly Bulletin Key monetary & financial indicators and the Kenya National Bureau of Statistics, Monthly CPI rates.

Projected Regional GDP Growths

Source: Focus Economics & IMF

Regional Currencies Depreciation against USD

*Regional currencies marginally affected by the US dollar exchange rate. **USD/SSP rates are as per Bank of South Sudan(BOSS)

Regional Outlook

Uganda

  • § The economy started improving in Q3 on the backdrop of exports and imports growing strongly after a sharp decrease in Q2, suggesting that both foreign and domestic demand strengthened in the period amid further easing of restrictions.

  • § In Q4, the private sector activity was at its highest level since the breakout of the pandemic, highlighting a sharp improvement in business conditions as further restrictions were removed.

  • § Consequently, output continued to expand, leading to higher employment levels and auguring well for private consumption in turn.

Tanzania

§ Credit growth picked up pace in the 3rd quarter of the year, boosted by the Bank of Tanzania accommodative policy, which supported domestic demand. In the same period, elections were held with no changes in government which was seen to lead to policy stability and a continued focus on boosting the economy after the pandemic-induced downturn.

§

In 2021, growth is projected to accelerate as aggregate demand recovers, although some risks remain. Probability of another wave of the virus could weigh on the domestic economy, while the recent surge of cases globally threatens the recovery of foreign demand.

Source: IMF, Fitch Ratings & Focus Economics.

Regional Outlook (continued)

Rwanda

§ The Country secured 172 new investment projects valued at $1.2 billion in 2020 and is expected to create more than 22,000 jobs once operations resume.

§

The fiscal deficit is expected at 8.5% of GDP in FY2020/21, with public debt projected at 67% of GDP by end of 2020.

§

There is optimism in 2021 with the anticipated economic recovery and the COVID-19 vaccines discoveries around the world to tame the effects of the virus.

§

According to the International Monetary Fund(IMF), with the resumption of economic activities, Rwanda's economy is projected to recover and grow at 6.3 % in 2021.

§

There is also gradual restarting of tourism, events, and meetings, which are key strategic sectors in the process of reviving the economy.

DR Congo

  • § The production of copper, one of the country's main exports alongside cobalt, remained robust in Q3, which coupled with rallying prices for the commodity since their pandemic-induced collapse in Q1 would be a short in the arm for the economy. Crude oil and Zinc output increased in Q3, likely providing further support.

  • § Domestic activity also seems to have benefited from easing price pressures and increased exchange rate stability recently.

  • § On the economic outlook, there are headwinds to watch out, including the economy's susceptibility to commodity price swings and a subdued global recovery.

Source: World Bank, Fitch Ratings & Focus Economics.

Regional Outlook (continued)

South Sudan

§ South Sudan would benefit from diversifying its economy away from oil. Accomplishing this will require large investments in infrastructure, human development, and stronger institutions.

§

In Q4 2020, the International Monetary Fund(IMF) granted the Republic of South Sudan a $52 million emergency disbursement under the Rapid Credit Facility to help its economy weather the shock of the COVID-19 pandemic.

Source: World Bank, Fitch Ratings & Focus Economics.

Notes

Notes

Notes

Equity Centre

P.O. Box 75104-00200, Nairobi.

Equity Centre, 9th Floor, UpperHill

Tel: 0763063000, Fax: + 254-020-2737276,

info@equitygroupholdings.com, www.equitygroupholdings.com

P.O.Box 75104, Nairobi.

@keEquityBank

Tel: 0763 063 000

keEquityBank

info@equitygroupholdings.com, www.equitygroupholdings.com@keEquitybank@keEquitybankwww.ke.equitybankgroup.com

www.ke.equitybankgroup.com

EQUITY GROUP HOLDINGS PLC AND EQUITY BANK (KENYA) LIMITED ARE REGULATED BY THE CENTRAL BANK OF KENYA.

EQUITY GROUP HOLDINGS PLC AND EQUITY BANK (KENYA) LIMITED ARE REGULATED BY THE CENTRAL BANK OF KENYA.

Attachments

  • Original document
  • Permalink

Disclaimer

Equity Group Holdings Limited published this content on 29 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2021 08:05:03 UTC.