UPDATE 1-Kenya Equity Group says pre-tax profit will decrease 30% in 2020

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NAIROBI, March 29 (Reuters). Kenya’s Equity Group Holdings announced Monday that full-year 2020 pre-tax profit fell 30% to ATS 22.17 billion ($ 202 million) as loan loss provisions increased due to the impact of the COVID-19 pandemic.

The group, which also operates in South Sudan, Tanzania, Rwanda, Uganda and the Democratic Republic of the Congo, announced that its bad debt provisions increased from ATS 5.3 billion in 2019 to ATS 26.63 billion.

Central banks in Kenya and other countries where Equity operates allowed lenders to provide relief to distressed customers in mid-March 2020 after the first COVID-19 case was reported.

Equity said it restructured ATS171 billion in customer loans, or 32% of its total loan book.

“That brought relief to our customers. This has helped keep the lights on in the economy, ”CEO James Mwangi said at a virtual investor briefing.

Mwangi said that by the end of December, ATS 40 billion of these restructured loans had been repaid, while a further ATS 9 billion was classified as non-performing loans.

According to Equity, net loans and advances to customers rose from ATS 366.44 billion to ATS 477.85 billion, while net interest income rose from ATS 44.98 billion to ATS 55.15 billion.

The ratio of non-performing loans to gross loans increased from 9% in 2019 to 11%, while total assets rose from ATS 673.7 billion in 2019 to ATS 1.02 trillion.

$ 1 = 109,6500 Kenyan Shillings reporting by George Obulutsa; Arrangement by Edmund Blair

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