Equity Group (EQTY) Q4 2025 earnings summary

Executive summary

• Achieved record profit after tax of KSh75.5 billion, up 55% year-over-year, making it the most profitable company in East and Central Africa, with strong contributions from regional subsidiaries and insurance operations.

• Balance sheet expanded 9% to KSh1.97 trillion, with customer deposits up 4% and net loans up 8% year-over-year; shareholders' funds grew, and the structure remains highly liquid and defensive.

• Regional subsidiaries now contribute about half of assets and banking profitability, surpassing the Kenyan operation and confirming the group's regional status.

• Operational efficiency improved, with cost-to-income ratio dropping to 51% from 58.2%, and over 98% of transactions conducted outside branches, 88% via digital channels.

• Strategic focus shifted from defensive optimization to aggressive, value-creative growth, leveraging efficiency, digital transformation, and regional diversification.

Financial highlights

• Net interest income rose 17% to KSh126.9 billion, driven by a 24% reduction in interest expense; non-funded income up 7% to KSh90.8 billion; total income up 12% to KSh217.7 billion.

• Cost-to-income ratio improved to 51%, with operating expenses down 10% and staff costs rising due to investment in digital and AI skills.

• Loan loss provisions dropped 28%, with NPL coverage at 67.7% and cost of risk reduced to 1.7%.

• Return on assets at 4.2% and return on equity at 26.8%; earnings per share increased 55% to KSh19.1.

• Dividend payout increased 35% to KSh21.7 billion, the highest in group history.

Outlook and guidance

• Projected loan growth of 8%-12.5% and deposit growth of 8%-10% for 2026; NIM guidance at 8.3–9.0%.

• Return on assets expected to remain at 4%, with return on equity between 25%-30%.

• Cost-income ratio targeted at 46%-49% as digitization and efficiency gains continue.

• Aggressive expansion planned, aiming for presence in 15 countries and 100 million customers by 2030, with significant growth in non-banking segments.

• Focus on scaling digital and AI-enabled capabilities and deepening inclusion through the Africa Recovery and Resilience Plan.