EQUITY GROUP'S NINE MONTHS PENDULUM

Because Kenya's Equity Group PLC has so many income streams and expenses, its statement of affairs looks like a pendulum swayed left and right as they balance themselves out.

This time though, the unaudited figures to September indicate that the pendulum settled somewhat a little on the negative side as from 0.43% rise in total income to Kes 56.67bn, 3.63% drop in profit before tax to Kes 20.734bn occurred.

The net result was that the Group's profit margin shrunk to 36.7% from 38.1% by September 2016. This is how the pendulum came to a stop.

Pulling to the negative was 11.1% decline in interest income to Kes 35.4bn as interest from government securities tried to turn the table by growing by 91.1% to Kes 9.779bn but double digit drops in loans and advances and Other interest income did not allow.

Applying more negative pressure were 5.98% growth in interest expense to Kes 7.923bn with customers deposits and placement from other banks interest charges increased by above 10% each leaving Other interest charges alone to drop by 12.6%.

On the positive swing were double digit growth in non-interest income except Forex trading income, up by only 5.29% as Other income jumped by 60.5%, fee and commission rose by 47.9% and Other fees and commission ended 16.1% up.

Still positive were 13.2% drop in loan loss provision, 10.7% decrease in staff costs to Kes 7.79bn and marginal 1.91% drop in directors fees.

Despite these though, and given 16.3% growth in Other operating expenses to Kes 11.95bn, total operating expenses rose by 2.24% to Kes 28.0bn thus applying the final pressure downwards for the group's bottom line.

It does not look like full year results, with three months, to go will be more positive departure from this.

EQUITY GROUP:  Kes bn Nine Months.
                                       2017.         2016
Total income               56.67.        56.43
Interest income.         35.4.           39.8
Fee and commission  4.35.           2.94
Other.     ".                     9.64.           8.30
Forex trading income 2.56.           2.43
Other income.              4.71.           2.94
Interest expense.        7.92.           7.48
Loan loss provision    2.88.           3.13
Staff costs.                  7.79.           8.72
Directors pay.             0.056.         O.058
Rental                          1.83.            1.75
Other operating exp.11.95.          10.28
Total operating exp. 28.0.            27.40
Profit before tax        20.73.         21.51
Profit margin %          36.7.           38.1

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