Equity Group has announced a significant increase in its dividend payout, reaching a record high and signaling strong financial recovery. The bank's decision to reward shareholders with a larger return follows a year of improved performance, effectively reversing a previous decline in earnings.

In the financial results for the year ending December 31, 2024, Equity Group increased its cash distribution by 6.25 percent to Sh16 billion, or Sh4.25 per share. This marks the highest dividend payout in the bank's history, up from Sh4 per share the previous year. The announcement coincides with a reported 10.9 percent jump in net earnings, with the bank posting Sh46.54 billion for the full year, compared to Sh41.97 billion in the same period last year. The group’s profit before tax also saw substantial growth, rising by 17 percent to Sh60.7 billion, while earnings per share increased by 11 percent to Sh12.3.

This increased dividend is particularly beneficial for shareholders seeking consistent returns, especially those who rely on dividends amid a challenging economic climate. Among the major beneficiaries of this distribution is Arise B.V., backed by the Norwegian Investment Fund, which will receive Sh2.04 billion due to its 12.76 percent stake. Equity Group Chief Executive James Mwangi is set to receive Sh542.4 million through his 3.39 percent shareholding, while the remaining shareholders, holding 62.8 percent, will share the rest.

Equity Group’s decision to raise the dividend, representing a 34.5 percent payout ratio, underscores its commitment to enhancing shareholder value. This performance is underpinned by a six percent rise in total income, reaching Sh193.8 billion. During an investor briefing in Nairobi, Mwangi highlighted the group’s resilience amidst a challenging global economic landscape, noting that their financial strength provides the flexibility to capitalize on opportunities as the regional economy presents diversified growth levers.

The group’s regional expansion and product diversification strategy continues to be a key driver of growth, with subsidiaries contributing significantly to the overall performance. Subsidiaries account for 49 percent of total assets, 48 percent of total loans, and 54 percent of profit before tax. Equity Bank Rwanda recorded a revenue growth of 36 percent, Tanzania 20 percent, and DRC 9 percent year-on-year. Profit after tax for Rwanda grew by 30 percent, Tanzania by 107 percent, Uganda by 186 percent, and DRC by 29 percent.

The group’s total deposits have reached Sh1.4 trillion, supported by a customer base of 21.6 million. Equity has also diversified its services into insurance, issuing 14.1 million policies in the past three years, serving 5.9 million unique customers, according to Mwangi.

Mwangi emphasized the success of these diversification efforts, noting the increasing contribution from regional operations. Equity’s life assurance business saw a 58 percent increase in profit before tax, rising to Sh1.5 billion from Sh934 million in 2023. The bank recently acquired a general insurance license, complementing its life assurance business and enabling it to offer a comprehensive suite of insurance solutions.

“As we continue to expand our financial services ecosystem, our Bancassurance unit remains a vital component of our growth strategy. The six percent increase in premium collections, despite the current market challenges, underscores the unit’s potential,” Mwangi stated. He also noted that their insurance premium financing solution has seen a significant 50 percent increase in uptake, reflecting a commitment to supporting customers through uncertain times as they prioritize protecting their health, life, and assets.

Equity Group's strong performance caps a successful year for Kenyan banks, which have generally reported substantial earnings despite a challenging economic environment.