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NAIROBI, Nov. 8 (Reuters) – Kenya’s Equity Group Holdings (EQTY.NR) on Monday announced it had launched a 500 billion shillings ($ 4.48 billion) loan program to help small and medium-sized businesses recover from effects of COVID-19 pandemic.
The bank posted an 85% increase in nine-month pre-tax profit, pushing its share up more than 4% to 52.00 shillings per share at 07:39 GMT.
In March, James Mwangi, its CEO, said Equity would spend around 400 billion shillings over the next five years on companies.
He said in an investor briefing on Monday that the “post-COVID resilience plan” had been increased to 500 billion shillings and was aimed at reaching 5 million businesses.
The lender’s nine-month pre-tax profit rose 85% to 36.6 billion shillings, helped by higher interest income, lower bad debt provisions and growth in subsidiaries, Mwangi said.
Pre-tax profit had fallen by a fifth in the first nine months of 2020, when the bank’s bad debt provisions increased.
Mwangi told the investor briefing that the lender’s net lending increased 23 percent to 559 billion shillings, and that is expected to rise 20 percent to 25 percent for the entire year.
Provisions for loan losses fell to 5.14 billion shillings from 14.76 billion shillings in the same period last year, he said.
In March 2020, the central bank of Kenya authorized lenders to restructure loans to companies affected by the pandemic and gave them until March 2 of this year to complete the restructuring.
Mwangi said that of the 171 billion shillings in loans restructured due to the pandemic, payments on 122 billion shillings resumed in the first nine months of this year, with payments on an additional 39 billion shillings in loans to resume over the next 12 months.
At the end of October, President Uhuru Kenyatta lifted the nighttime curfew in effect since March 2020, which should revive economic activity. Read more
Equity also operates in Burundi, Democratic Republic of Congo, Rwanda, South Sudan, Tanzania and Uganda, and has a representative office in Ethiopia.
($ 1 = 111,5000 Kenyan shillings)
Reporting by George Obulutsa; Editing by Kim Coghill and Barbara Lewis
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