Overview:

Pan-African lender Equity Group posts a 24 percent jump in Q1 profit as regional subsidiaries now generate half of the company's total banking profits.

NAIROBI, Kenya — Equity Group Holdings reported a 24% surge in first-quarter profit on Tuesday, raking in 19.1 billion Kenyan shillings as the lender leaned heavily on its regional subsidiaries and a massive shift toward digital banking.

The pan-African financial giant saw its balance sheet expand 16% to 2.04 trillion shillings. This growth was anchored by a 13% rise in customer deposits and a 9% expansion of its loan book, targeting the retail and small business sectors.

The bank’s push beyond its home borders is paying off significantly. Regional businesses now account for half of the group’s total banking profitability. Equity Bank Tanzania led the regional charge with a 150% profit spike, followed by a 36% rise in Rwanda and a 32% increase for EquityBCDC in the Democratic Republic of Congo.

In its home market, Equity Bank Kenya maintained its dominant foothold, posting a 21% profit increase to 10.3 billion shillings. The Kenyan branch disbursed more than a third of its total small business loans during the three-month period.

Physical branch visits are becoming increasingly rare for the bank’s 22.7 million customers. More than 98% of all transactions now occur outside brick-and-mortar branches, a digital pivot that has driven operational costs down and improved the group’s cost-to-income ratio to 50.6%.

“Our first-quarter performance reflects the success of our deliberate transformation into a diversified, regional, technology-led financial services group,” James Mwangi, the group’s managing director and CEO, said in a statement.

Beyond traditional banking, Equity’s insurance wing is emerging as a lucrative new revenue stream. The insurance division saw its gross written premiums jump 30% to 4.5 billion shillings, pushing its pre-tax profit up 53%.

The group also cleaned up its asset quality during the quarter. Non-performing loans dropped to 10% from 14% a year ago, and loan loss provisions declined by 18%, signaling a healthier overall portfolio.

On the philanthropic front, the Equity Group Foundation noted it has facilitated hundreds of billions in credit to small enterprises and is currently rolling out a $25 million agriculture program with the Mastercard Foundation to support farmers in Tanzania and the DRC.