Kenyan Listed Banking Sector Quarterly Earnings and Operating Metrics

• • . Equity Group Summary of Performance -Q3'2022 Profit before tax increased by 21.0% to Kshs 44.3 bn, from Kshs 36.6 bn in Q3'2021 with the effective tax rate declining to 22.4% from 26.6% in Q3'2021 Total Operating Income rose by 26.9% to Kshs 102.1 bn, from Kshs 80.5 bn recorded in Q3'2021 driven by a 23.4% increase in Net Interest Income (NII) to Kshs 59.8 bn, from Kshs 48.5 bn in Q3'2021, coupled with a 32.0% increase in Non-Funded Income (NFI) to Kshs 42.2 bn, from Kshs 32.0 bn in Q3'2021 The balance sheet recorded an expansion as total assets increased by 15.2% to Kshs 1,363.7 bn in Q3'2022, from Kshs 1,184.3 bn recorded in Q3'2021 • The Group's Gross Non-Performing Loans (NPLs) increased by 20.8% to Kshs 67.9 bn in Q3'2022, from Kshs 56.2 bn recorded in Q3'2021, while Gross loans increased by 20.8% to Kshs 716.6 bn, from 593.1 bn in Q3'2021, leaving the NPL ratio relatively unchanged at 9.5%, similar to what was recorded in Q3'2021 Going forward, we expect the bank's growth to be driven by: I. II. Innovation and digitization continue to enhance high value transaction - Increased innovation and digitization have seen 99.0% of all transactions of the bank being done on alternative channels, with mobile and internet transactions taking up 81.2% of all transactions, and agency banking contributing 6.3% of all transactions. In terms of the value of transactions, digital banking, branches and diaspora remittances contributed 46.9%, 27.3% and 4.9%, respectively. This highlights the transformation of branches to handle high-value transactions which aid the bank by offering its ecosystem banking products to retail and SME clients Continued expansion through acquisition of other banks in Kenya as well as in the region, with Equity Bank Kenya in the process of acquiring Spire Bank Limited. Additionally, Ethiopian government recently decided to open up the financial sector to foreign investors which provide a great opportunity for Equity Group to expand its operations into the untapped market Cytonn 42

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