Equity Bank Uganda leads profit surge as regional units deliver half of earnings

Equity Bank Uganda Limited emerged as the fastest-growing unit within Equity Group Holdings in 2025, posting the biggest earnings expansion among its regional subsidiaries and underscoring the growing importance of East Africa to the group’s profitability.

The Ugandan unit recorded a near tenfold increase in pre-tax profit, rising 865 percent to KSh4.52 billion ($30.1 million) from KSh468 million ($3.1 million) in 2024.

Tanzania followed with 127 percent growth to KSh3.51 billion ($23.4 million), while the group’s home market, Kenya, posted an 86 percent increase to KSh93.6 billion ($624 million). The Democratic Republic of Congo (DRC) recorded a 59 percent rise to KSh32.1 billion ($214 million).

But Rwanda posted a 4.36 percent decline, while South Sudan swung to a loss of KSh858 million ($5.7 million).

Regional subsidiaries drive profitability

Regional operations are increasingly central to the group’s performance, contributing about half of total earnings.

Profit after tax from subsidiaries rose by 55 percent to KSh75.5 billion ($503 million), up from KSh48.8 billion ($325 million), highlighting Equity’s transition into a pan-African financial services group.

In the DRC, profit after tax rose by 58 percent to KSh24.7 billion ($165 million), supported by 17 percent loan growth. Uganda’s profit after tax surged 500 percent to KSh3.6 billion ($24 million), while Tanzania recorded a 125 percent increase to KSh2.7 billion ($18 million). Rwanda posted a profit after tax of KSh5.4 billion ($36 million).

“Overall, subsidiaries contributed 51 percent of banking profit before tax and 48 percent of profit after tax,” the group said in a statement.

Commodity boom supports regional growth

According to the group, a commodities upswing is supporting economic activity across key markets, particularly in the DRC, Tanzania, and Uganda.

High prices for gold, copper, and coffee—combined with relatively lower oil and wheat prices and a weaker US dollar—have strengthened macroeconomic conditions across East Africa.

“Although geopolitical risks have risen due to the Iran conflict, the impact is expected to be temporary. Oil prices briefly spiked to about $100 per barrel but are projected to ease to the mid-$60s following a ceasefire, helping stabilise trade and inflation,” the group said.

Uganda turnaround after challenging year

The strong performance marks a turnaround for Equity Bank Uganda after a difficult 2024, when the subsidiary was impacted by a significant fraud incident.

Despite that setback, the bank has rebounded strongly, supported by lending to key sectors including hospitality, agriculture, and oil and gas under the group’s Africa Recovery and Resilience Plan (ARRP).

Uganda is also emerging as a major gold trading hub, benefiting from the global bullion rally. Gold exports surged by 75.8 percent last year to $5.8 billion, overtaking coffee as the country’s largest export, according to the Bank of Uganda.

Strong macro backdrop supports business activity

The East African nation’s broader economic environment has also supported banking sector performance.

The country recorded the strongest private sector activity among eight African economies tracked, with the Stanbic Purchasing Managers Index averaging 53.7 in 2025, up from 53.3 in 2024. Readings above 50 indicate expansion, while below signals contaction

The index remained firmly in growth territory, supported by strong consumer demand and stable macroeconomic conditions. According to the Uganda Bureau of Statistics, inflation stood at 3.1 percent in December and eased further to 2.9 percent in February.

“Uganda’s private sector performance reflects a resilient domestic economy,” said Christopher Legilisho, economist at Stanbic Bank in a recent report.

Group posts record earnings, stronger balance sheet

At the group level, Equity reported record full-year results, with profit after tax rising 55 percent to KSh75.5 billion ($503 million).

The balance sheet expanded by nine percent to KSh1.97 trillion ($13.1 billion), while customer deposits grew four percent to KSh1.46 trillion ($9.7 billion). Net loans increased eight percent to KSh882.5 billion ($5.9 billion).

Net interest income rose by 17 percent to KSh126.9 billion ($846 million), while non-funded income grew 7 percent to KSh90.8 billion ($605 million), pushing total income to KSh217.7 billion ($1.45 billion).

Operational efficiency improved significantly, with the cost-to-income ratio declining to 51.0 percent from 58.2 percent, supported by digital adoption and cost discipline.

More than 98 percent of customer transactions were conducted outside branches, with 88.4 percent processed through digital channels.

Digital strategy, regional expansion drive outlook

Commenting on the results, James Mwangi said the performance reflects the success of the group’s strategic transformation into a diversified regional financial services player.

“Our regional subsidiaries now contribute about half of our banking profitability, demonstrating the value of our pan-African footprint and the resilience that comes from diversification,” he said.

The group is actively pursuing an ambitious expansion strategy to enter new African markets, aiming to increase its subsidiaries from the current five to 15 by 2030. 

The Nairobi-based regional banking giant is focusing on the following key expansion  is prioritizing entry into Angola with plans to acquire a majority stake in a local bank in 2026 to tap into the oil-rich market.

It is also considering Ethiopia: After delays in negotiations due to regulatory hurdles, Equity has maintained a representative office in Ethiopia for several years and is moving to convert this into a fully operational subsidiary, focusing on securing a top-five lender position through acquisition.

The group has identified strong growth opportunities in Zambia, Mozambique, Ghana, Côte d’Ivoire, and Cameroon.

The group has proposed a dividend of KSh5.75 per share (a$0.038), up from KSh4.25, representing a total payout of KSh21.7 billion ($145 million).

Equity Bank was also named best regional bank in East Africa and retained its position as Kenya’s most valuable brand in 2025.

Looking ahead, the group noted it will continue to execute its 2030 strategy anchored on the Africa Recovery and Resilience Plan, leveraging digital and AI-driven capabilities to scale growth, deepen financial inclusion, and expand across the continent.