Equity Group Holdings Ltd

Equity's profit growth outpaced revenue, with the June 2026 release showing continued expansion and lower gross problem loans.

FY2025 parent profit rose 54.6% to KES 71.96bn; H1 2026 parent profit grew 31.5% year on year. Capital ratios eased from December despite remaining substantial. This local review scores three financial axes only: competitive durability and current valuation are unassessed, and the stored quote remains dated 24 July 2026.

Equity's bank-specific evidence is more informative than industrial leverage ratios. Group total capital was 18.7% of risk-weighted assets at June 2026, down from 20.5% in December 2025 as the balance sheet expanded. Gross non-performing loans fell 22.2% from a year earlier to KES 108.37bn. Parent equity represented 15.7% of assets at FY2025 close, up from 13.0%. That combination supports resilience, while the declining regulatory ratio warrants attention; accounting equity is not regulatory capital.

FY2025 operating income increased 12.4% to KES 217.74bn, below its FY2022-FY2025 CAGR of 14.3%; the lower rate sets the growth score's band. Parent profit rose much faster, by 54.6%, because earnings also benefited from the expense and funding-cost movements. H1 2026 adds a separately measured update: income grew 24.6% and parent profit 31.5% against H1 2025. Six-month results are not annualised or substituted for a complete financial year.

FY2025 parent-profit ROE rose to 23.3% from 19.9%, and ROA to 3.65% from 2.58%, using closing balances. Net interest income grew to KES 126.94bn as interest expense declined, while total operating expenses fell 5.6%. This explains why profit grew faster than income without claiming every expense reduction is recurring. Banks do not use the industrial gross-margin ladder. Their operating cash flows also reflect funding and lending movements, so industrial free-cash-flow conversion is not a sound profit-quality score here.

Equity's improving returns do not establish whether today's share price adequately compensates for credit and capital risk. The stored price is from 24 July 2026; no current quote or independently verified current market capitalisation was collected for this review. I have not combined that stale price with newer interim earnings to present a current multiple. Valuation is unassessed, with no target price or recommendation, and the composite covers only the three assessed financial dimensions.

Equity's higher earnings and capital base do not, on their own, establish a defensible competitive advantage. This review has checked the consolidated annual figures and June 2026 statutory release, but has not established customer switching costs, pricing power, market-share trajectory or the economics of its distribution network from sufficient dated source evidence. Business quality is therefore discussed but not scored. This avoids counting the financial improvement a second time as proof of long-term franchise strength.

1. 01

   structural

   KES 108.37bn gross problem loans remain credit exposure despite the year-on-year reduction.

2. 02

   leverage

   Group total capital ratio declined from 20.5% to 18.7% between December and June.

3. 03

   margin

   Falling funding and operating expenses supported FY2025 profit; repeating that benefit is not established.

1. 01

   growth

   Sustaining H1 2026 income growth would corroborate the stronger recent operating trend.

2. 02

   structural

   Further resolution of disclosed problem loans would strengthen the quality of the lending book.

3. 03

   balance sheet

   Capital growth keeping pace with risk-weighted assets would stabilise the regulatory buffer.