Equity Group Holdings Plc (EQTY) Earnings Call Transcript & Summary

For those who are following us online, the questions and the queries that you might have, kindly post them online, we'll be able to respond to you. And it's now my honor to invite the group CEO and MD, Dr. James Mwangi, to come and present the half year results. Dr. Mwangi?

Thank you very much, Alex, and very warm welcome to all of you. We are delighted to have you, and we trust that we'll have a good morning together. So we look back at the performance of our group, the Equity Group, for the past 6 months of this year. This presentation and review will be slightly different. We have been going through a journey of transformation. And I'm sure you all remember that have really focused on how we are inducing transformation, the change and the disruption. So we now start focusing on outcomes. We have been on transformation for 4 years. We'll now forecast on what is the outcome of all this transformation? What can we see as transformation? It's early days, but we want to capture the narrative adding enough so that we could work with the impact of change. I want to thank shareholders for their patience during these 4 years that we have been building the organization. And we then start -- I want to start with where we are with the governance structure because the strategy we know we've been dwelling on the strategy. Broadly, we have completed the governance, leadership and lead management framework. If we can go to the first slide, and that's how the new Equity Group looks like. As we can see, the technology group is in place, it has 2 licenses. The banking group is complete, which of the subsidiary with a bancassurance as the distribution vehicle, the Group have an investment bank. And now the structure of the Health Group is complete. We have the 3 licenses that we've been waiting for. The general insurance commenced business in January to be able to see the results of the first 6 months. And we got the health insurance license in July, and we hope we'll start seeing the outcome for the general insurance. The foundation has continued to play a very pivotal role. It has helped in ensuring the transition moves well. We've now started to see the foundation has started also creating a structure of its own. There are components that can be done by in the foundation like health, and it has its sort of subsidiary in Equity Group. I just want to point out that the foundation and the financial group, economic regimes and the social regimes are parallel to each other. The foundation is not a subsidiary of the economic group. We want that independence. We want to ensure this regimes creates positive tension between themselves. But -- and that is really, really important. In terms of how the flow of governance structure is, the breadth and depth, I'm glad that, again, we have really focused on creating the governance structure, and we have created the leadership structure both at the Board and Executive, and we can now say we have the team that will execute the future of this group. The search has been long. It has been waited, but I thank God that the brand has been able to bring on Board people, who can be entrusted to take us the next phase. And this has also been completed at a subsidiary level. So that now is not talking about effort. Then we contextualize. This transformed Equity Group they operating environment and we see the global environment is still weak, but it's having signs of potential green shots either because of lower prices because of pockets of growth that we can tap on and also because Africa and specifically East Africa is going through a positive tide. And as we see the growth whatever inflation still have not been brought under control. Ideally, inflation in the developed world is always below 2, and we can see 2 has become very sticky even where we are doing very well like the Eurozone, we are stuck with 2. And that then has kept interest rates very high, and high interest rates are not good for GDP growth. So GDP has remained very, very depressed. But when you come to our region, which we could call the Eastern Central Africa region. The story is very, very different. We've said this before, but this is emerging as the fastest growing region in the world. We are very confident that these will be long-term growth. The headroom for growth is very high. The runway for that growth is very high because it's built on fundamentals. And it's fundamentals of economic activities, development of infrastructure and investment in social assets like education and health, and this growing competitiveness and also growing relevant to the global market. The East African region provides significant solutions to the future of the world that we are all trying to build. And it's in that context that the transformation of Equity would not have happened at a better time because then you could be able to convert these opportunities into commercial value and that would be music to the ears of investors and shareholders. And that is why we are saying we now focus to assuring them how this value will be unlocked. A very special mention, is the relationship that is evolving between the Bretton Woods institution and this region, again, demonstrating interest by the world. I think the geopolitics, we have seen how central the Eastern Central Africa is becoming to the global geopolitics, whether it is Qatar, whether it's African Union, whether it's in U.S., trying to provide solutions for the challenges that may be conflicting the region. But the more important thing is how we are then positioned in that region? You can be a very transformed organization, but how are you positioned? And as we can see, we are very well positioned, particularly in the critical markets of Kenya and DRC, where we occupy position 2, but it's not just position 2, it's a substantial position 2. It's a relevant position 2. When it comes to DRC is a systemic position, 25% of the market share. You go to Kenya, it's 13% of the market share. You go to Rwanda, it's like 19% of the share. So if you then combine -- combine the capability of a transformed organization, an environment that is enabling and the capability as is being shown then you then see how the future can look, if we continue to execute the transformation. As we can see, Uganda, we are almost becoming relevant in Uganda. We can comfortably say by the end of this year, we set to #4 organic growth, if there is inorganic growth that will put us quickly to position 3. And then we bring quality in the region -- we are confident we'll be close to position 2 South Sudan by the end of this year. And then we are left on finding a solution of becoming systemically relevant in Tanzania. And that positions us the go-to bank for trade finance and cross-border trade. That will be very important and a national partner to the African continent of free trade area. That kind of position then gives you a competitive advantage and gives you a head start ahead of everybody else. So if you play your game well, then it become an easy way. In terms of depth on governance, we have really seen a very significant change in shareholders. We have been telling it as a story, but it appears we have won the trust and the confidence of our investors. So we have seen a structural position. And we're very excited to see that the social security funds in the region now anchor the bank. Yes, there is a huge foreign component of shareholding, but the region is anchoring. The message we are getting when we see Kenya Social Security Fund; Uganda Social Security fund; Rwanda Social Secruity Fund being on the top is that it has settled well with the investors that we are a long-term investment because of our largely big growth and high return. So it's a growth and high return. And when you combine those 2, then you set to naturally, the advantage of social security funds is that they are long-term investors. They invest in pension money. So you create stability in your shareholding. And that then joins our 2 largest shareholders. IFC is not a trading investor, Norwegian Sovereign Wealth Fund and Norway's Sovereign Wealth Fund, those are long-term investors. So again, once you stabilize and then you realize these are deep pocketed shareholders then you are confident that they will walk with you the journey of growth and your strategy execution. At the Board, I'm sure you have seen, we have revamped and strengthened the bench of the Board to bring the skills and the competencies that can challenge us not to take comfort with the success of the fast phase. But people who now have not brought us here substantially they are setting new goals because they also want to show contributions in their 3 years. We are delighted that at the Group Board we were able to attract 2 former Vice President of the World Bank. And both at least former Chief Risk officer of the World Bank, retired just in November and is helping us to this risk and having that risk global level is lifting us to the next level. In terms of investment, former Vice President of IFC in charge of the investments. And we're also glad that we are also able to attract the former Head of Research and Product Development at JPMorgan and former Chief Executive of BII, the British Investment International, who then brings the knowledge in many years in this spaces. And that then strengthen the governance people who have everything to lose, the reputation they have built as the Vice President of the World Bank, they will not keep quite when things are not going -- they'll call us out and that is a sense of independence, somebody who wants to make a contribution to Africa. And we're very proud that this brand gives such a caliber of people the confidence that we will not drown their reputation that we can build their reputation by the impact that give me confident that people believe in our strategy and its execution, and we have the reputation that it will take through that governance structure has really executive management, as most likely you see, it has continued to be renewed, and we are happy that we almost have everybody who wanted to have in management and now it is execute, execute, execute. It's no longer strategizing, it's execute. You can't execute, if the capability is not at par with the responsibility. And I'm glad to have won the confidence of this team that I can help them orchestrate their capabilities and deliver for people. We are happy with the strategy, the African recovery and the resilient plan has got a huge acknowledgment globally. It's now being referred as the [indiscernible] brand for Africa. People are playing on it, and we have used it to develop our business plan for 2030 and essentially that overlap makes our [ lanes ], the public [ lanes ] for the development of the African continent. I think with customers, we have realized we need new different products that really focus on the segment that the African recovery and resilient plan forecast and so on. Agriculture, mining, manufacturing, SME, trade and investment, energy and technology. And we are seeing that the appropriate solutions no longer talking about products that have been put in place. People we have said we have got the right people. We have created the right environment to continue to retain those people. We have attracted them. The challenge is to retain them and to challenge them to be the best of themselves or the best fashion of themselves. But the biggest achievement has been on systems. The infrastructure, the backbone that we needed that is scalable, that is next generation, that is digital, that is machine learning enabled, that is AI enabled has been completed. The only thing we are now doing is processes and procedures. Processes, because we need a new generation of what one would call application so that we innovate on -- we don't innovate in infrastructure, we innovate in application. And that again, so we are confident that, that has come out well. And the framework has now been fund, and we can confidently say that from the strategic framework, we should be able to deliver on our objective. And we are not chasing 2030, we are sure that we are confident there are gaps, we are aware there are gaps, but we want by 2030, 30% of our loan book be invested in transforming agriculture, so that we are relevant to the 70% of African population that -- whose employment is in agriculture, 30% GDP contribution, 46% of foreign exchange earning is all about agriculture. But that agriculture should then lead to our growth processing and the fast layer of manufacturing. And we hope our manufacturing will come to 15% of the balance sheet in terms of loan book. Trade finance, we think will become the most popular solution because it's all about trading under the African Continental free trade area. But that would then also mean that this verticals of the formal sectors will be populated by SMEs and to formalizing SMEs and ensuring they take 65% of 100%. We have no doubt about bringing on board 100 million customers. That's what the ambition is. And we feel the tools are in place. It's not just being in place, but they have been tested. So when we look at the banking group, we have started seeing this transformation has brought in added efficiencies and optimization. And I can't help myself looking at this slide and seeing the green colors and the direction they are going. Any investor looking at Kenya, net interest margin moving from 6.5% to 7.5%, that really tells you efficiently has been unlocked. And you don't need to wait for long, you quickly see it impact, when you look at the return on assets because it is not the balance sheet that is growing, it's not the assets that are growing, it's the efficiency that is being unlocked. And that transformation then gives shareholders a return of 3.9% from 2.8%. A 100 basis jump within a year. A balance sheet, the size of Kenya, which is [indiscernible] then tells you what it means when you move. When Kenya [indiscernible] the subsidiaries in the region or the investment in the region, it was doing a return of 4% on asset. And Kenya has bounced back to 4% to return on assets. But this time on a very big balance sheet. And that explains why return on equity is now at 28%. If you look at Equity BCDC and we have done a lot to delivery it to Kenya and BCDC because Kenya is 55% of the balance sheet and BCDC is 36% of the balance sheet. So you are saying when you combine 50% and 30%, it's 80% or 85% of the balance sheet is behaving the way what an investor would like to. Our net interest margin above 7.1%, and this is in dollars. So this is not in Kenyan Shilling, it is in dollar and then we can move to 3.1%, and return on equity moves to 23.5%. So we could say DRC now has a TAM equal to the cost of capital. So it changes the game. It's no longer where it was giving us a return lower than the cost of capital. And we see Uganda. Yes, net interest margin of Uganda didn't look sustainable, as you can look there. So we have no problem with them coming to 9% because it means that they are normalizing. And the real game is at the normalize. What is happening to the return on assets? And that's, as you can see, from 2.2% to 3.4% and return on equity from 17% to 25%, that is the transformation we have been talking about and the picture then becomes clear. One might see Rwanda, and I want to show it to people who may be thinking Rwanda is red, but look at where Rwanda is operating in. Despite the big rise in interest margin, it still has the highest return on assets and return on equity. And remember, last year, Rwanda acquired Cogebanque. So despite the growth by 25% or 30% of balance sheet, return on equity and return on assets have not been significantly dilutive. So it's more of an adjustment, is when the subsidiary is unlocking the synergies and of course, efficient market like that, net interest margin, we expect to be the lowest. So that can grow. But despite that, the return on asset. It's not surprising that Rwanda is the aspiration of subsidiary when it comes to cost to income ratio, it's operating at 35% cost to income ratio. So it has set the standard, and we have got subsidiaries if the model can be delivered at a cost to income ratio, what are we doing at the group level at cost to income ratio of 50%. So it gives us a headroom that maybe we should be able to reduce the cost to income ratio for the group by about -- to 40% in the short term. And that's then a balance sheet of KES 2 trillion. When you start reducing cost to income ratio at a group level by -- from 50% to 40%, we all understand what it means. The biggest transformation has happened in Tanzania. As we can see, Tanzania has upped it's yields. It has now hit 4% return on assets and 27% return on equity. So it's the entire business that has transformed. And that, to me, is the biggest thing we have achieved. It is the entire group. It's not pockets within the group that have stimulated the change, but change, transformation has occurred in this entire group. South Sudan, I'm sure I have said it repeated, don't worry about South Sudan, it's on maintenance of license. The performance of this year, as we saw in the first quarter have been affected a lot by South Sudan. But that is inflation accounting. It has nothing to do with cash. So it is accounting for inflation. And broadly then if you look at the numbers behind this -- the ratios are the most important aspect. But we can see the greatest maybe success on a broader perspective is where we see the subsidiaries in regions are now contributing 49% of our deposits. So this what one would have caused diversification of the sovereign risk, we're in a good place. We have thought to be at 70% Kenya. Kenya has now been reduced to 50%. Loan book, 50% of their loan book. And so they shocked. And we will see that is why the returns are very well distributed because the risk has been fairly distributed. Assets at 48%. Again, we can see a complete replica. If you believe in the Kenyan model, then the regional model is a complete replica of Kenya. Because as you can see, 50% of deposit, 50% of the loans, 48% of the assets, 50% of the revenue. So the model has really been implemented with amazing precision, amazing precision. And that is the execution. We have always known Equity is famous for its execution capability. Let me draw a bit of attention on -- because it all boils down to what does this mean to the shareholder? Look at a return on equity, Kenya is at 28%, but the regions in is 24%. So as they mature and they become more efficient, it means they can do better than Kenya. And return on assets 3.2% and 3.9%. So we have pulled very, very, very well as far as the -- and if you look at these numbers, if you look at South Sudan because you need some time to do an adjustment. You see the position of the South Sudan is inflation accounting. It's not an operational profit. So things could have been fairly different. Asset quality, despite and we all know that the NPL for the industry are elevated at 17%. We still have been able to maintain our NPLs at 13.7%, showing what we have said before, our NPLs have peaked and now it's tracking them down. And as we can see, it's a recognition of the corporates that we have been talking about, but you all are aware that we have now got to the last phase. And we think the corporate loan book that we have been talking about will be softer at this year because all of them now, we have got most of the judgments, and we should be able to do. We've maintained the very strong coverage for those NPLs, so even when we collect these corporate NPLs, coverage will bounce back to 90% on it's own without needing to go through the P&L. So that coverage story demonstrated and a comparative with the industry gives us confidence that it's not just about growth, a quality growth and it's value-accretive growth and the control environment has been -- so that gives you a view of the regional expansion plan. We started as a Kenyan bank. We will be lying to the world if we say we are a Kenyan bank. We are now a regional bank because 50% of the balance sheet is about Kenya, but we are heavily equipped in Kenya that is maybe the new reality is a regional bank with its heavy quotas or roots in Kenya. But then we also said, yes, we have done very well in banking. How can we do in insurance? And we said, let's diversify the product offering. It's not just about region, the product offering. Can we equally be successful? And we are very impressed that gross written premium start the year is up 115%, revenue, insurance revenue up 59% and net insurance and investment revenue 30%. And you can see our profit before tax has gone up 26%. What is incredible and forever be grateful to the team insurance is that it's now self-funding. When you have that level of return, you don't need to keep on looking capital. You only need to tell shareholders to be patient, but internally generated cash. So we are not going to dilute shareholders because we are growing fast in insurance. But look at the assets. In 3 years, we have managed to reach about KES 1 billion in terms of assets in the insurance group and the liabilities, as you can see, of [ 23% ]. So -- but that is a group level. When we do a deep dive, how is this group insurance? This is -- you then look at the life insurance, our first born in the insurance group. The first born is only 3 years old, is preparing to go to [ BB ] school in third year. But look at how our [ BB ] is performing, KES 3.8 billion in terms of premiums written insurance revenue, almost KES 1 billion and net investment and a profit of KES 890 million. So essentially, the insurance group at the moment is equipped to the life assurance or ELAC as we call it. But for an investor, what they would read and look most is, how is this growth? Is this growth creating value? And we see the return on equity is at 40%. We are very excited with return on equity in the banking business around 27%. The insurance, life insurance, it's at 40%. We are very excited with 3.8% return on asset, return on asset on the life business is at 4.7%. So -- and this is off balance sheet. This is non-funded income. And maybe it's for the investors the issue is how you value you have streams of income. Non-funded income attracts very different valuations from balance sheet funded income. So this is contributing to non-funded income is significantly changing the structure and quality of our revenue and income. And maybe I just needed to emphasize that because we have seen how it is growing. And it's moderating now the group. It merely means more. But when it's at this level of returns, it's almost 2 times the return numbers of the banking group. But I think, while this is good for investors, what we look at is the impact we have in society. And when you look at it, we have now done, in just 3 years, a 16.6 million policies. And as you can see, in just half year we have done almost an additional million new customers. And it's not just a policy standpoint, it is at the diversified reach, it is 6.7 million unique policies. So we're almost heading towards 3 policies per customer, and that is real thing that is crucial in the insurance business is taking ground. I'm told by [ Ajara ] that these might be about nearly 3 times the policies of the rest of the insurance industry. That is what Equity did. It brought or helped to bring financial inclusion from 4% when we started the journey, we are now over 90%. People have access to finance. Looks like insurance, people get access to insurance. But what really pleases me most is that it's 3 policies. People are not going for the mandatory insurance. They're now thinking about their health insurance. They are thinking about their life insurance. And shortly, they will be thinking about the investment cost of -- how big can these scale be? If we go back once right, it's fulfilling to see that 79% of the policies are issued online. So we are almost now making it easy and convenient. And there is no time you get insurance, you get insurance when you need it. So we have compressed the time. It doesn't matter where you all, we have also compressed destination, so our geography for that matter. So whether you're in -- you can take an insurance policy irrespective for wherever we are. We have a very deliberate and intentional focus to SMEs. Why? Because that's where our people are, that's the businesses they run and we want to work with the regulators to ensure significant coverage. I remind you 65% of our loans are in SMEs. So if that's wherever we are from the banking perspective or from banking forecast, then we want that to be that on insurance. We distribute to the people who are building our economy the people in the real economy. And when you look at the position, it's a fairly strong part for this business, as we can see, group credit is ranked #2, return on equity is #7 and profitability is #8. I guess Ajara is from 56 insurance companies. We did pretty happy. And it's a journey. It has started very well and so we could really see that the transformation of diversification and all that now we will be doing is to report numbers to you. The potential is very, very high because we are coming from a low base, and we believe that this will be a game changer. Earlier this year, we got approval for the general insurance and the general insurance, as you can see, have no comparative numbers because it started at the beginning of this year and at the beginning of this year, it has started to generate meaningful numbers. And as we can see, it has a profit before tax of KES 32 million. Within 6 months of our startup it has made KES 32 million. Return on equity, too early to speak, 6.6%. And I can't wait to see the competition between general and life insurance or life assurance because they seem to be. And while the group, we are feeling the best thing to initially allow them to operate completely independent of each other so that they need a scale, they need to compete because that's the way we could be best. I'm glad that by the end of the year we will bring you -- now the health insurance, it got its license in July. So -- and because we have been waiting, it has started lighting business. And hopefully Dr. Gatonga will have something to report for the third quarter. Dr. Gatonga, as you can see, it's been profitable in 6 months. So it can also be profitable in 3 months. Now these really underpins how the transformation was done. It was heavy lifting, a lot of hard work and now is just reporting the numbers. It will be just more of reporting. I think the story that I don't really want to forecast more is the technology group. As we said, we went to the technology group to enable the business or the group to really have reliable technology. That's why we got the MVNO, the PSP license. And if you look at it, brick and motor is only doing 1.3%. It's now less than 2% of the customers, who use our traditional infrastructure of branches. The business has gone digital. And even third-parties, real estate agents, ATMs, merchants, those are on digital platforms in one way or electronic, let's use the word, the right word electronic platforms with a back office that is digitized. And if you look at the channels, you can see what has happened. The business that customers have migrated from fixed and variable cost channels to sell service. We had fixed costs, then we moved from fixed cost to variable cost and now no-cost model because it's the customer serving themselves. So look at how quickly everything on fixed cost is on a decline. Everything on the variable cost is on a decline. And it's on a number of transactions and volume. And look at what everything in self-service is on an upward growth trajectory and that essentially, we have really now to look for uses of branches. The branches are no longer relevant for transaction business. And we need to look at how do we innovatively and creatively have the fixed cost channels to start generating revenue? And we have called that the commercial conversation and we must find. So if we move this cost to start generating the cost of fixed channels to start generating revenue because, as you can see, it's not generating -- is a cost driver. It's a cost only, but very importantly holding the brand, how do we make commercial value? And that is the net phase. And it's like creating a double charge with very good business on self-service, let's go back and rebuild the old model. We like it, and I want to emphasize, we're increasing branches, not because they have to do transactions, but we are now on Equity. One Equity, the branches can have a very different business model and that is what the strategy team is thinking about, how do we start to generate the revenue to correspond. So when you look at nonbanking business, because we looked at the banking business, when we are looking at the regional approach, it then combines the insurance and the technology group. This is more diversification on business lines. It's not regional. It has a regional approach, but this is now moving away from banking to insurance. So it is not that we are no longer a Kenyan bank, but we are no longer a Kenyan banking group. We are now a financial group, bringing banking and insurance together and converging and recognizing that there has already been a convergence between banking, insurance and technology. its platform businesses. So essentially, we are building a layer of technology. We've also seen the brick and mortar we have seen has been replaced by self service, that model is a technology model and essentially, so it is not technology as a technology company, but technology as a business and that is what maybe I want to emphasize on because we now ask the technology business to come out and see banking, insurance and technology competing at businesses not as service provider, not as a cost structure, but as a profit center. And essentially, you see a lot of work. The way we are making brick and motor to start becoming a business and we are developing a model the technology group is also on the work to make it. And remember, it's one Equity. The costs have all been cut. And the additional revenue that we get from the branches because of a innovative model to use that infrastructure, we only have revenue, the costs is already -- they sunk already. Any revenue we get from technology, we just go down to the bottom line because the cost has already been had of acquiring technology. So I think that as we can see, assets from this group has moved from KES 1.4 billion to KES 1.9 billion. Revenue from KES 2.8 billion to KES 2.4 billion. For you to be -- sorry, from KES 2.8 billion to KES 4 billion for a startup to be able almost to double and eating from a very big group. The banking group is very, very big. So to see insurance and technology growing faster than the banking group it tells you how fast these startups are growing. And that is why they're able to breakeven. Dr. Gatonga said, you hold in October, I can't wait for October Dr. Gatonga to see your results general broke even in the 6 months or break in 3 months. Why are they breaking in 3 months? Because they are leveraging on a powerful brand, and they are not investing to create a brand. Creating a brand is the most expensive and people underestimate to what this group will become, simply because they are leveraging the most expensive items. They don't have that. They don't have the infrastructure. They're using bancassurance for distribution insurance. So essentially the technology business is coming on top of the infrastructure that the banking group has paid to be provided technology as a service. And then they are converting that asset or real estate of technology into revenue-generating assets. And that is why the breakeven very quickly. And we're not being surprised. The issue is how big could they become? And so our focus on this strategy is scale, it's growth that is what we said we will be measuring. The construction is over and is the growth. But as we do this, it's giving us enough revenue then to too good to society. We have always believed that doing well can be done alongside doing good. So we have scaled up our investment in society, shared prosperity. We don't want to be seeing this very, very successful group, but enjoying success alone. We want to enjoy success with the members, who want to enjoy with our host community. We want to enjoy this with the public. And we have everything for everybody, for our rural community, we have food and agriculture. For our young people, we have education and leadership programs and we have enterprise development and financial inclusion, they can employ themselves. And for all of us, we have health, energy and environment. So nobody is being left out. And you can see the staggering amount of money. If you multiply $715 million with 130, it tells you the amount of money in excess of $100 billion that we have expected in shared prosperity. This is that both best kept secret. And I hope we will be able to articulate it more and you help us to really talk about the social impact. When you look at the numbers staggering 60,000 secondary scholarships, 2.5 women and youth trained on financial is crucial. It means that we might be doing more than all our good qualities puts together in terms of -- if you look at SMEs and this is put COVID alone, nearly 700 micro, small and medium enterprise train, given KES 400 billion. And as you can see, how well they are doing in creating jobs. Dr. John, we are now at what? 2.4 million jobs. And you can see we have a lot of trust in our education, but look at the number of kids that we have been able to set out. And I'm glad that immediately after this, we'll be giving air ticket to 123 kids to fly out of the country in search of opportunities. And I'm happy to say 14 -- how many are going to schools, 16 of those who will be giving tickets. In 1 year, you are sending 16 kids to schools, 123 kids abroad that power is as we succeed, society succeeds. It's alignment of interest between an organization and society and community. Look at the farmers or look at -- we had a target of 35 million trees. We didn't stop there. We said, this is our new way of life, planting trees. And we hope we'll catch up. But the most incredible impact has been on social impact, look at social impact. 5.9 million households relying on Equity to be able to lend it to them social safety payment. We talked about the other day here, and we make Dr. Mwangi stand up how look now it's not about standing up, it's people, it's the footprint to the Equity clinic 4 million patient visits have been recorded and we are talking about a start-up. So the Equity brand is that powerful. It goes to health, it becomes a heat. It goes to insurance, it becomes a heat. And hopefully, we use this concept to serve most of society's problems, whether it is marginalized with the social safetiness, whether it is now we are thinking about innovation for our young people because we believe the challenge of Gen Zs is not a political talent, it's an economic challenge. We must give them opportunities and we will use the capability of these bank to reach out to young people. And we can see what we have done with SMEs, train them, give them money, hand hold them. But what we are thinking now is why don't we make the 23 million customers of Equity a market place for them? And then the just -- and we give them the platform about the digital public infrastructure to sell to our population. It becomes a captive market of 23 million people. We believe to satisfy the needs of 23 million people with quality services, quality products, we should be able to create 10 million jobs. We should be able to create 10 million jobs, very easily. So we'll you with partner and see what we can. The wrong story seems to be coming to an end. How does the balance sheet of the group look like? But as you can see, you can see the partners continue to increase. We look at the needs of the partners, and we have grouped them. Banking partners, who are signed to the African Recovery and Resilience Plant, funding partners who have taken ownership into the bank and EGF foundation partners who are giving us partnerships into programs. It looks like the screen is becoming smaller and smaller and smaller. And next time, you may not be able to see it, I will have to read the names for you, that again talks about the brand, the trust, Equity enjoys, not among its people, but also global. As the world recalibrate to find the solutions to the that we have had for as we knew it, we believe, together with this team, we should be able to provide a solution. So that leads us to the balance sheet of the group. And the balance sheet of the group has gone through a lot of restructuring. So if you look to the bottom of it there, yes, despite very challenging macroeconomic environment, as you can see, we have grown 3%. I want to say it is not 3% because if I was asked, I would add the 9% reduction in borrowed funds, we chose strategically to shrink the balance sheet by removing borrowed funds because they were becoming increasingly unaffordable. So that is deliberate. So if we had maintained the borrowed funds, the growth would have been different, but we have choose them to levy. But what excites me about this balance sheet? For the first time in 4 years, if you look at net room, they have grown by 4%. We're saying, yes, it's challenging, but we'll not abandon the people. We have developed the capability now to lead challenging environment. The bank -- the group is becoming increasingly resilient. And during difficult times, to start with it's people with its members and within the communities, it's operating. And so I'm so excited to see the change in net rooms is the exact change in cash and cash equivalent. We're now moving. And that values, it's helping those who need money despite the challenges. It also means earnings. Cash doesn't earn. But as soon as you migrate it and that is the biggest opportunity we have. It's not just moving the cash. If you look at the number just below cash, that is government securities of [ KES 540 billion ], it needs to go to fat guy in rooms. And I think those who may not have understood this balance sheet and the potential it carries, it can still double its income by just reallocating not growing the balance sheet. If we grow balance sheet, and that's why you find we are not forecast on growing the balance sheet. We are forecast on optimizing the balance sheet. And the best way of optimizing the balance sheet is to reduce the past 2 lines, and reallocate that to the third line, give it out in loans. The government pays us now maybe 9%, but the customers will be willing to pay 14%. You can see the yields. And it looks like we are now able to manage credit much better. So that is the potential of this group. It's not growing the balance sheet. If you have been measuring the growth of the balance sheet as an investor, you are missing it. It's how Equity reallocates the balance to the highest earning asset classes. That is the big responsibility. And when we start talking about the business is digital, then it start telling you. Today, I think on the business data, and I'm not advertising the business data. It has a very beautiful article. There's a bank with 55 million customers, that is digital another 1 with 33 million customers, but we have 23 million. But you can see when you go to the same business daily, it says which bank has the highest number of customers with more than KES 500, KES 1,000 in the bank account and yours truly raises it hand on behalf of Equity Group, we have 139,000 of our customers having above KES 500 followed by a bank with 121,000. Now you can see the comparison. Number of customers but who is making the biggest difference in the customer. That number is because we are an SME bank, and we continue to strengthen us. Money made by businesses. It's not employees, who have a medium balances in their bank account. It's the businesses in their current account in their transaction accounts. So a lot of forecast on SMEs, and that's why the foundation is very central to us to delete and to capacitate our people to get into business, and we are willing to take the risk. We recently signed KES 0.5 billion guarantee with African Guarantee Fund. And it's simply to say we are upping our appetite on taking risk on small and medium enterprises. And you can see the impact. This effort has not been in vain. You can see a bank can have 55 million customers, Equity in Kenya because these are Kenyan numbers has only 14 million. But when you go to where we have the most successful customers in Equity. Bank can have 33 million, Equity has 14 million, but Equity has the most the accounts that has demonstrated capabilities. So that is how to read this balance sheet and this -- the latent power within this balance sheet and their ability. So as a macroeconomic environment changes, I want to say, want to support the government, and we have asked them to allow us to graduate those the government has delisted. The government has been giving 26 million young people that has who have looked at the list and said we can onboard them in the bank. And so digital capability, you find us going digital capability is now to be able to scale. The money is there. What we don't have is the borrowers. We will optimize profitability if we are able to reduce government securities from 540 to about 75 billion. So what it means 450 billion needs a home in loans. And that explains the African recovery and resilient plan and the opportunities it gives us in transforming agriculture in partnership with right-minded people, particularly with the finance, where we will provide our balance sheet and they provide the funding for capacitation, derisking, risk sharing. And so we see within a short time, we'll be able to convert these government securities into loans. And I will leave you and your calculator to compute the implication that we'll have as I turn to the page way to have -- to have profound impact. And impact will be in income statement and we see the decline in interest income. We're now getting up there, moving up. It's no longer declining, but I think you can see, again, the reason why we slowed the balance sheet growth, as we said, we deposit at any rate. We'll make a following possible and we reduced our interest rate. Yes, we lost about KES 70 billion of selling, but we said meaningful. So you can see the transformation that has happened. Net interest income, as you can see, have grown all the way 9% for the first time in 4 years, and we're struggling with nonfund debt. ForEx is a challenge there, transaction is a challenge. But I'm happy to say our total net income is a growth of 3%. Again, as we have said, we have managed our loan book that we are happy with the quality, we are happy with the coverage. And this is the prudence of Equity, be proactive. But now we don't need -- we now can sail into letting without necessarily having to provide. You can see the cost of additional staff or the staff we are bringing then we have been able to mute other expenses and we'll mute those -- no, we may not mute to expenses more. What you see is revenue as we make use of technology as a business to start generating revenue, as we make the branches to start becoming profit centers as that -- as opposed to cost centers. So our total cost down 2%, giving us a profit before tax of 2% and profit after tax of 17%. If you look at profit before tax, and we have said when it includes South Sudan, if you remove South Sudan that, that profit before tax goes to 20%, that's how profitable the transformation has been. But we have to account for inflation that is inflation accounting. So minus South Sudan is done, which is the license maintenance subsidiary, the business is doing. South Sudan has not taken away the KES 3 billion loss that is registering from the group because it has no impact on cash and that is what people need to realize that it is what one would call an offset. So that is where we are making good progress, very difficult times. What does this show? It shows the resilience we have been able to in-build in the group during this transformation. It was to build the resilience. We have learned the hard lessons. It started with interest capping those who can remember, 2016, an interest capping were retained all the way to 2022. And we could inflate because the cost of risk was higher we couldn't let that cost risk and that's how the KES 500 billion was accumulated. Now lending we can price risk, so we could -- as you can see, we have started releasing the money back into lending. And you can see a direct correlation between the reduction. The second asset was that hit us very hard is COVID, and you know how disruptive COVID was. That shock came and really we struggled with it, but it was the unintended consequence of COVID disrupting global supply chains. So things like trade, investment were muted completely, and this is the ramification. It may have been 2022, 2020, but the effect is felt going into the future. And that is the future that now we are living of the aftermath of COVID. But most underestimated impact came from Russia-Ukraine conflict or war, as some people call it. And simply because the two economies were dominant suppliers of grain and food to the world and energy, both oil and gas, particularly the dependence on Europe. So what did they do their conflict made the world go back to the 1970s in terms of food and energy inflation. That's where the biggest program came to. And this was not a country. It was not a region, it was global because food is grow. Energy is global. And the world to manage the inflation, which we all know went all the way to 10% the interest rate. So the economy is dealing with high inflation and very high interest rates. And we saw inflation, although it was 10, it has come to 2, but is still above the global long-term averages, which are always below 1, below 0.5. So we are still 4x higher than the average. So interest rates have not come down as they should do. And as you can see, the lag, a huge lag, and that is what has affected us and lessons of this shock that never again into the future, shall we be hit and made redundant by shocks. We create a resilient business model. And the transformation was to build resilience in the group. And as you can see, the balance sheet has now become very agile because we have built in the resiliency that was necessary. It has taken us 4 years, 4 years that has disrupted our track record of growing 10x every 5 years. Every 5 years, we have only grown 3x instead of 10 in the last 5 years, simply because of being disrupted. We think we have now built at shock-resilient -- the shock we know where it doesn't mean there would be another shock, but if this is a shock that we have created the agility, the flexibility and created sufficient buffer to be able to do the -- what has this done, if you look at the previous slide, look at what has happened to shareholder. We're now near 300 billion. We are now above $2 billion in capital. Why? Because the created to take care of mark-to-market, which are almost at least 90 billion has now been released. And this, you can see if you have a capital of 300 billion, 25% of 300 billion, you have almost single add of Africa of 75 billion. Equity now can go to development space. And that explains why we are leading the world in the comp grouped in the campaign of private sector led the development financing because we now have the capability we have the comfort. When you have a single of 75 billion, [indiscernible] And given that we decided to develop the Africa Recovery and Resilient plan or the African like plan in a collaborative way with IFC, with IMF, with the UN, with 24 development banks, then that capability to syndicate for the development of Africa. I'm very excited and I'll give enjoy a movement or to tell you a little bit about the influence we have had to develop the concept. And I'm glad we have now -- we are about to release a white paper on that space so that we could be able to lead the transformation of Africa through the private sector. The private sector. Roads can be done by the private sector through PPPs. The government's headrooms are very narrow. The debt pattern has shocked to the government. And as you can see, debt repayment is now even a bit more than the current expenditure. That's we all need to rise -- it's not sustainable. Why don't we get the capital of the private sector to do development financing? And I take real pride that we have been able to craft that ability. So if you take it up in just 1 page, we see customer deposits up 2% to KES 1.3 trillion total income for 6 months reached KES 100 billion, so almost giving us a guarantee that there will be more than KES 200 billion revenue group by the end of the efficiencies, ratios, NIM, up, cost income measure. I want again to talk about that number. That number is inflated that we are seeing in South Sudan inflation, that is what is causing a large cost -- if you adjust for the cost of inflation because it's factored in the cost income ratio, we are navigating to add 48%. So we are -- the trend is the right one. And we see that when you go to the individual Kenya, which we used to operate at 56% is down now close to 48%. So we can see the trend is right, but that number has been affected. If you look at loans, up, profit, up; assets, up; profit after tax, up; return on asset, up. I can tell you if we deal with the cost to income ratio adjustment of the number of inflation accounting, which we saw gross profit jumps from 12 to 20, cost/income ratio will be positive, return on equity will be positive. So the dashboard is all green. So the 2 legs, as we have said, that is inflation accounting and you can discuss at predict the future because I think future is more important for investors. Investors never investing into the past, they invest into the future. They bet on a company's future. And I want to draw you to the last 3 quarters. For the quarter, we made a profit of KES 9.7 billion. The first quarter we made KES 18.6 billion. The second quarter, we have made a profit of KES 22.9 billion. Your guess is as good as mine. The transformation is complete. This is what you need to be measuring us. How long will this waterfall last? It can last as how long it will take us to move the KES 500 billion from government stocks to ready. That's the what you need. It will take us wrong as to take us to completely tank our technology investment into revenue-generating investment. If you take us wrong as converting our branches to a different business model that generates 11 because they are now just cost, technology and branches are just cost structure. We need to convert them into revenue generating. And so that graph can be a steep as it is, but I bet it will be steeper than that, and it can be for a long time. Investors don't say you have never told. Have taken a little bit of time because this is technical, and I wanted to simplify it so that all investors have the equal chance in decision-making. And it's also good to say, KES 22.9 billion is the highest quarterly profit we have ever made in the history of this bank. So we are setting a new history. But I don't want to say it's a new history. We have innovated a new Equity is a new business moto. It was not optimizing on the business we had. It was about dilating the business model we had and completely transforming it. If we look at 22.9, it compared with the last 4 years, average of quarterly profit of 14.8, that gives you the delta of the transformation. And we are saying, it has just begun, it has just begun. Because that is the delta we have and a delta, you can see going forward, the average try to not fall below that as a new business that we are. If you look at 10-year average, it has been 11; 4 years, 14. What does it mean? Business is freely transforming. New average going forward, not below 22. You can choose where your future is, but as an investor, we are inviting you to bet on us. We have been transparent, very open and we have given you the data. This is because we appreciate you walking this with us. If it was not for you, this would never been there. You trusted us, you put your fate on us, now we are saying the hard times are behind us, not because the environment has changed, but because we have learned how to operate in a challenging environment. And we have developed a decedent business model through regional diversification through business line diversification, changing the delivery channels or deliver a model from a brick and mortar, fixed cost to a variable to sell fabs, the cost structure are very different. And I've taken a bit of time because I wanted to honor the investors who have joined us today, investors who are only to understand the game has changed. This is a new invention in business model of how to transform to disrupt yourself, be honest to yourself, transform yourself and look for better days. So let's look at the ratios. How are we sitting on the ratios. And shareholders will be more concerned about capital. That's where I want to talk about and look at your capital. The capital is growing. What does it mean? We are now generating internally enough cash to fund this growth unless we want to the growth through mergers and acquisition, we are comfortable. Our shareholders can see knowing unless it's acquisitions, I'm not going to ask them for capital. And the only thing that you can anticipate is enhanced the dividend going forward. So that's how to interpret those issues. But I think we talked a lot about KES 0.5 billion that needs to be moved. Look at liquidity. That is the second Is that movable? And as you can see, it's liquid, liquid means cash and near cash. So it can be liquidated on demand. So it's an here are the 2 tests -- and as we saw, again, efficient look at the cost of risk, we are moving in the right direction. Coverage has been -- we are not profitable because of coverage and look at PAR, we have moved from -- and we are making good progress to get back, and we hope in the fullness of will be below 5%. So if you go below 5%, cost of risk can be about 0.4. And then it tells you how much efficiency then will be released to the bottom line. We know the lines that we need to do. I want to introduce our new Chief Business Transformation Officer, Murage why don't you pick the mic and introduce yourself. That's a man who has been given this mandate. And maybe that's why staff costs have gone up by 10%. But we think it will reward it. Now why did we bring Murage is to ensure the lessons that we have learned over the last 4 years are codified and put on paper and institutionalized so that this agility becomes our way of life. Business balance sheet restructuring, the lessons of what to do and what to do.

Thank you. Thank you, James. And my name is Anthony Murage.

And you can be generous. I've been very efficient, so Shareholders need to know who they are trusting. That one you can leave out.

Well guided, Dr. James. Anthony Murage, I recently joined the group as a group CFO, but with a very clear mandate on business transformation for the group. And I think Dr. James you've talked quite a bit about some of the things that are already in flight. It's very clear from the presentation, we -- the transformation is paying off. Early days, but tremendous good results. What are we focusing on? I think it's to solidify that success by couple of things still, again, we can do more. I think I like your words, it's a balance sheet optimization. It's not really focused on growth with the current balance sheet, the investments we've made is about leveraging those technology. We need to unlock that. There a lot of upside there. We need to improve our profitability and there's a gap on income. I think that's a big focus we shall focus there. But on costs as well, I think you talked about the investments we've made in technology. We are automating, we need to make sure efficiency. And learning from some of our subsidiaries that are doing very well. You talked about the transformation we've seen. I mean, the results in Tanzania, in Uganda. But Rwanda, Rwanda is best-in-class when it comes to efficiencies. So we need to replicate that and scale even more across the group. From a balance sheet perspective as well, we are looking at strength from a capital perspective, we're in a good place, but continue to strengthen that. We are looking at our funding diversifying -- not funding. But I think our biggest opportunity...

I'll request Anthony was to introduce yourself.

Okay. All right. Okay. Thank you. So I'll come back to that. So I recently joined the group, having spent 25 years at PricewaterhouseCoopers, working initially in Nordics and later on moving on to consulting. I spent about 11 years as a partner. We did a lot of work across the continent in Europe and Middle East focusing on financial advisory, financial reporting, mergers and acquisitions. So again, that's why I've been a consultant quite a lot of my time. That's why I very quickly sold me going on into relisting, we understand the challenge, we understand the opportunities and how to address it. Thank you very much, Dr. James.

So Anthony was the senior partner in Pricewaterhouse for 11 years in charge of capital markets and advisory in the region. So -- and we needed that somebody from the region because we want to be advised about the region. And my take from him is early days, it's very early days. Don't think this is optimized transformation. This is early days. Transformation will happen when the KES 500 billion gets when liquidity moves from near 60 to 28, we optimize profitability at 28. Now you can see that delta, pivoting working that is what sorry, Mr. Anthony is very good at and we really want to lead there. I think to do that, we will need a lot of paternerships. And our last 2 people who are in charge of partnership, Joy and Dr. John maybe to talk a little bit. We can start with a Global Affairs Director, Chief Communication Officer.

Thank you very much, Dr. Mwangi. As you could see from the Africa recovery and resilience plan, we can't accomplish everything in the plan without partnerships. And so we have been looking for partners across the platforms in the Africa recovery and resilience plan for trade and investment for agriculture and natural resources for our SMEs in the clean and green space and technology. And so we have a variety of partners that we have been really bringing on board to crowd in capabilities and capacities to deliver the Africa recovery and resilience plan. And since I have the mic, I'll just also extend the conversation to the private sector with...

Yes, and maybe before she does that, she has said crowd in, those who have capability. Equity cannot hold transformation of the African continent. It's just providing leadership. It's just orchestrating, like-minded people and saying we are African, we understand Africa, you can rely on our capability, our infrastructure and our knowledge so that we do it together.

And to that point, I would say that the example that we have tried to put out into the world that purpose can be profitable and profit can be purposeful is also what we're trying to do with the private sector work that we're doing. We're trying to share our example with the rest of the continent. So that other companies and other partners can take forward, the example that we have been exemplifying for so many years now. And that's the work that we're trying to do with the private sector. We -- since January, we have been working with the IMF with the Club de Madrid...

And this your camera.

Yes. Okay. Thanks. I'm from CNN, I should know that. But since January, we've been working with the IMF with the Club de Madrid, with the World Bank, with the United Nations, with many other partners, including the Rockefeller Fund, Milliken, Ford foundation. And we went to Civil with a plan for how the private sector could actually crowd in different kinds of financing essentially with the partners to deliver development in a time when the development progress has been solved because of the cuts in international funding. And I think that you'll see over the next few months that we're going to deliver a formulaic white paper that we will be presenting at the G20 in South Africa in November and then also to the G7 leadership at the French G7 Summit next year. We're partnered already in New York during UNGA to workshop the white paper that we have developed with about 100 different partners at the Clinton Global Initiative in New York.

So ideally is to bring the walls to support African development differently this time using the private sector, African private sector so that you build the capacity in the country. The argument we advanced to the world is we okay financing government, but the governments are not involved in development. Development, which is GDP, or gross domestic product, is an aggregation of goods and services produced in a country. It's the private sector has produced goods and services, not the government. Government is an enabler and it creates a environment. So we said should help government to create an enabling environment for the private sector to allow our private capital to grow to produce goods and services in a country. And I'm glad that agreement won and it's now being presented to all the global organs. But back home, Dr. John, how is it happening in the foundation?

Yes. Thank you very much, Dr. Mwangi, and good morning, investors, partners and our guests this morning. Yes, so if you've seen the presentation that was shared by Dr. Mwangi that cumulatively as you've seen, we've currently had about USD 713 million going into our social impact investment cumulatively, of which about 81% have been investment directly for young people in the skilling education programs and exposure really for our young people.

True, the way to transform Africa is to invest in education and we are glad that we now have an opportunity to use the best universities or NAS to develop human capital for the African continent in universities, now we have 29,000 scholars and we'll have that because it will be 42% of the 60,000 such that we have a critical mass of the right skills, the right experience, the right exposure. And we have maintained them in So that -- so it is not just about investing, it is investing in the future, in the leadership, business leadership, civic leadership, political leadership, people who has a generation should be able to put Africa. This is not in Kenya alone, we're in BRC, we're in Rwanda, we're in Uganda, and we're starting in Tanzania. So it's really a generational leadership in the markets that we operate.

So besides our focus, which you've always known us to take in terms of the entrepreneurship and financial literacy, we have capacity building as well in food and agriculture, which is a [indiscernible]

Why? Because it's entrepreneurs who create wealth. We are building on entrepreneurs. They are not job so young people, but they're educated. We have highly educated entrepreneurs. We want to persuade them to go to their family business and formalize and transform those business, that's really the gist of it. And we hold there. We are forming clubs so that we can have these clubs where we exchange the ideas and our most accomplished customers will be patrons to those clubs and they will be having meetings regularly so that we generate, we create a generation of entrepreneurs who make this nation a startup nation in terms of businesses and formalizing and hopefully will get iconic. I was very delighted to see Kenya now is leading in Africa in terms of icons, there are 300 icons in the world I think Kenya has a few. So we want to lead it, make our scholars to be part of driving that agenda.

Yes. So we maintain the same forecast at the end of the day, but we are saying now how can we do it perhaps differently and ensure that we're able to deliver the same impact, but at scale? You've heard about ambition to be able to reach 100 million people -- impact 100 million lives by 2030, which means we need to look at ways in which we can do it more effectively, efficiently, perhaps through digital channels. So in view of that, the foundation is also more things to also introduce us to say how can we empower young people to be able to take up those opportunities that present. And of course, as indicated is that our health programs are also ensuring that we focus on maintaining the resilience of our communities because we've always said before that good health is both an ingredient or an input as well as an outcome through economic development. So for us, we maintain the same forecast, but also while exploring new ways of being able to deliver that impact. Lastly is that we are immensely grateful to our partners. If you look at the partners that we started with across the foundation way back in 2008, about 17 years ago, is that we've maintained the same partners being able to onboard new ones, being able to design new programs with them at scale. So even as we crowd new additional loans, we are grateful that we maintain our portfolio of partners as indicated. Thank you very much.

So agriculture transformation center of this plan because that's what African recovery is all about. Development of a very central to that plan. Young people and innovation center of it, but more importantly health, because of the productivity of population. Education is not enough. You need to be healthy population for productivity to gain. So a lot of what you see case at the level may be not seen before happening because we have the trust, we have infrastructure that can be able to land these programs better than before. But as we said, you will not be able to manage these unless you understand the economies. You have to understand the economy because we are now operating at not at the enterprise level, but at the economy level. So do you want to project how the region looks like because this plan is as good as the region and the way the region is positioned. That's our Chief Economist. He's backed by an economic advisor to me, and they are doing a stunning job in predicting.

Thank you [indiscernible] I think one of the things we're seeing macroeconomically and I just took to the end of the year and into the second half of the year is that there are several bright spots that we can take advantage of, and there are several risks that we need to look at several rather. So the bright spots we're seeing first of all in DRC is that the economy is ticking along well. We've been able to secure a lot of good funding from the IMF and the World Bank, that's good concessional lines. And we are seeing, of course, through the peace agreement that there's positive sentiment that hopefully that will be implemented and settle the region down. So the outlook for the DRC now is much stronger than it was in the beginning of the year, and we're really hoping that the implementation of these agreements will foster that. Uganda is in a good space. Of course, we'll be going into election soon. But one of the things that we're seeing from Uganda, they'll be getting a lot of ore revenue, hopefully, from next year going forward, that's deep U.S. dollars that weren't previously in the economy, and we're also seeing a return of concessional financing to Uganda. the World Bank is going to be back, and they may have a program with the IMF. Concessional financing is important for our government. It gives them access to cheap money to allow them to then make it productive. Tanzania, again, good pace. We don't see uncertainty in the election. Of course, there's heightened tensions. We're seeing the incumbent probably coming in through. And then we're going to have a good ramp of 5 years of quite a bit of policy stability we were able to meet with the governor of the Bank of Tanzania about a month ago. And they're really focused on economic growth and implement the new vision for the country Vision 2050. So I think in terms of the opportunities there, we're seeing quite a bit. Regarding Kenya, I think one of the opportunities in the bright spot to see that our ForEx engines are doing very well this year. Our remittances are doing well. Our tourism is doing well and agricultural commodities are doing well because the weather has been favorable. We've also seen food inflation going down. I mean it's been ticking up a bit, but it's been much lower than usual. But obviously, the low oil prices are really helping inflation go down. We're seeing low oil go through to the end of the year and also be positive for most of the region with the exception of South Sudan. Of course, South Sudan, one of the things we're seeing the contraction that was anticipated in the economy may not be as pronounced as we thought. One of the things that we are seeing in South Sudan is the need, I think Dr. John's point was very true for foundation support to really come in and support the communities there, particularly with regard to mitigating the effects of climate change. Rwanda, in a good space, again, we've seen some currency volatility. But I think because of the peace agreement, hopefully, you're going to see some stability going forward there. So I think I'll just stop there, so I don't take too much time. So the prognosis is mixed in terms of bright spots, but we are -- I think I've mentioned some of the risks that we're looking at, particularly in the physical space for Kenya. I think we're still monitoring the elections for Uganda and Tanzania. And of course, the DRC and South Sudan conflict is something we'll continue to keep an eye on. Thank you.

Thank you very much. So this front can be as good as it can but the environment in which it is being implemented counts a lot. So it looks like the environment is better than even the plan. we seem to be guys who were in the right place at the right time. But we are not just coming at the right time, but with the right capability because we have transformed ourselves and made ourselves very agile. Talking about that agility and maybe what is most important is that we're also transforming our organization culture We want to be customer-centric, very customer-centric and very market-driven. And the reason why we have the customer is because the customer needs the same things, so whether they're in DRC or Uganda or Kenya. So the common theme is the customer. And so we want really the culture. It's about customer centricity, market awareness or to be market-driven culture. But of course, professionalism and the integrity, the foundation that the values that have brought this bank, but this time holding ourselves strictly to our values are being audits of product to ensure there's no division. So we're very, very confident. The last one is that we promised that this brand is not about Africa feeding itself. It's allowing Africa to play appropriately in the marketplace. And the marketplace is a global economy. It's unfortunate that we are 25% or 20% of the world largest. But our power is 2%, 3%. Our trade is 3%. And we're 18% of the world's population, but everything else is below 3%. The objective is to bring investment into Africa and open Africa for those investments, but also open the world for African commodities for trade. And that explains why recently, you have seen us trying to take Africa to the world and then bring the world to Africa. And I'm sure all of you noticed when the shareholders approved first international office in Dubai. And I'm glad to say we have now appointed our UAE and Middle East first Director and maybe if we can give, the mic and have so that people can know. First of all, introduce yourself and then speak to what is the responsibility -- your responsibilities. If you start the mic, the camera will be -- yes.

Thank you, Dr. Mwangi. Good morning, everyone. I'm Dr. [indiscernible] As Dr. Mwangi mentioned, I'm the UAE Country Director also responsible for the rest of the Middle East. In terms of my background, I have a PhD in Islamic banking from the London School of Economics. I then moved on into diplomacy. I was Malta's representatives to the UN's International Maritime Organization. I also start some time as the Prime Minister's Adviser on trade and investment, focusing on third countries that wanted to use Malta as a stepping stone into the European single market. And I was also appointed special adviser to the EU's first commissioner for equality. I've also then spent time as a consultant in the Middle East, where I advise governments on diplomatic engagements, notably COP28 and the WTO's MC13. And I've also worked with private companies on public private partnerships. And I'm delighted to be here now with Equity.

And the responsibility in UAE? An update?

That is the tall order, but I believe that in the beginning, our immediate priorities are going to be Diaspora, trade and investment and, of course, working with the foundation to find ideal partnerships to invest in Africa.

And ideally, that is why a PHD in Islamic Banking because this is a bank, is all about because the Middle East banks are all Islamic Banks, so we needed somebody who understand how do we view. As you heard, she wants to focus on diaspora. It's the fastest-growing African diaspora, Middle East, how do we get the remittances back. They need to be structured with the banks, partnerships and framework within the bank. But if you look at her very well, her biggest job has been in trade. And I don't want to say she's the one who was behind Malta, but Malta now is the fifth strongest shipping line business in the world. It's a sort of a Singapore perspective. The question is how can we develop trend and malting trade between Africa and Middle East is a point-to-point and maybe maximum 3 days for a ship to move from Mombasa to Dubai. That's the thinking. How do we get trade, how do we get the wealth that is coming in the East Asia and India pickup Africa, how do we link Africa with the region for global growth, India, China and Middle East? So that's really -- and of course, this is a diplomatic job, you can't get better if you negotiated the European Union Brexit treaty. It gives you that level. And this is what we are saying about governance, the skills and competencies that this bank is put is not in the room, but the Europe desk offers. Again, so we don't want to say we are just taking Africa to UAE. The tradition of partners of Africa is Europe. So we've opened a desk for Germany and one for France and one for U.K. We have just agreed with the U.K. ambassador. And what we have seen is like a French one, in just one year, we have opened 38 accounts of French companies that want to be matched with African business people for flow of capital and export of goods to Europe. It's really this is optimizing. We have also another office in the U.S. based in Washington and these offices are to bring the world to Africa, make them understand Africa. And it's not negative that we have to appoint a French or a German, but to be in Germany because it's helping the Germans to understand. So somebody who is based here, but working in Germany and France to bring those companies so that they are grounded and are working within the business. How has been your success in your first year?

Good morning, and thank you very much, Dr. Mwangi. The introduction was just right. My name is Patricia Jannack I'm the German and European Debt Manager at Equity Group. And we just recently had a very successful German desk annual reception in June, where we invited around 80 German companies to celebrate with us the first part of the German desk. And besides traditional bank accounts. Of course, I facilitate business and trade. The Germans and Europeans are keen to join us through our DSC trade mission in September that come to Tanzania and Uganda in April. And we are the only bank in Kenya that has such a European desk. So we are the forerunners of trade between East Africa and Europe.

And I want to call on our customers really to take advantage if they want to export, we now have a desk to help them to export. If they want to import, we have a desk to help them import. So the international trade challenges have been resolved for our customers. But not exclusively for our customers, for anybody to our practice in Africa. And French desk anything?

Good afternoon, everybody -- sorry, good morning. My name is Mahvish Malik I'm the Associate Director for International Trade Relations. I also oversee a lot of work at which Patricia does, which includes, of course, French companies. My work is, of course, to enhance strategic partnerships within the European markets as well as globally. We recently hosted an Italian Technical Leather Technical Association here in Kenya. It was a very successful 3-day event, and we're looking to potentially sign an with the government of Kenya and the Italian government facilitated by the Italian Embassy. I would encourage and invite you all to attend our webinar tomorrow. We are hosting a webinar on unlocking trade and investment opportunities within the DRC. This is a lead up to our -- it's a teaser for our trade and investment road show to the Lubumbashi and Kolwezi in DRC, which will take place from the 14th to the 20th of September. So please do join. It takes place from 2:00 to 3:30 p.m. tomorrow and very excited about it. We will have interesting interlocutors from the investment promotion agency in the DRC from the private sector as well as a number of key private sector players. Thank you very much, Dr. Mwangi.

It's really amazing that Italian leather craft coming to Africa. And broadly, what we are saying is that the region has 25% of the entire world in art yet it never benefits from skins and hides. It only takes the meat. When we looked at the value, we realized the meat is less than 1% of value. The real value is in level, but not exporting. It will brew, it's exporting leather handbags, it's exporting leather shoes or making them. That's where the value is. And I'm very excited that part of the agreement is bring this investment into the region. And I'm sure you all know our conference, where we are trying to develop the GI for coffee, for tea, for macadamia, for rice, and avocado. And you can imagine when they get the geographical identification, the power, but you can't get a global indentification and as your processes. So we are forcing value addition. That's why we exited about the special economic zone in which will host all these things and then you expect a finished product. We're optimistic price will not go below 10x. You can imagine if the price of tea went up 10x the value the transformation in the tea growing zones. So this is the relevance of bringing the world to us and taking us to the world. like we are lobbying using the Washington office. We're almost sure that the products we are championing will be on the American-Kenyan trade agreement. That's when you say, yes, the world has come to consume African products. So we do that with UAE and do with the others. I think Africa can't continue to remain closed to the world. And the world can't shut its doors to Africa, we'll break those doors. That's the essence of getting people who can break the doors, because they understand they have the capacity and knowledge. I think we have said enough, allow me to sit so that those who paid the price of being on the podium or got the privilege of sitting on the podium can pay their price by answering your questions. So I invite the questions. Thank you very much.

So the first question? Questions are really coming. Very good.

One of the things that I've heard from you today, is this is issue of growth that have [indiscernible]. Can you please say a little bit more how we are executing that? I've been trying to manage and help in Kenya for the last 25 years, and I'm interested in that.

Broadly, the team, as Dr. John then prepares and our team to tell us so where we are. And I don't know how to say this, but in 2005, I won the Group of Vision Award of business model, the model we have developed and can see where the model is 20 years later. 2012, I won the World Entrepreneur of the Year Award followed closely by the Forbes African Person of the Year, adding up with the Business for Peace, what people call the Nobel Prize for peace in 2020. And I've asked myself, how can I share the knowledge of the entrepreneurs? I've been very privileged to be in many advisory boards. I'm on the treasury council for the World Bank on jobs. I'm on the advisory council just technology investment group in the world. And the question is, how do we use this knowledge to help our customers? How do we help this sons and daughters, the heirs of our customers' businesses so that we can have a and the idea is by using your [Foreign Language] to write your If it doesn't dim your [Foreign Language] it just makes the room brighter. So if we make the businesses of our customers brighter, Africa is better, and I believe Equity will be able to reallocate the KES 500 billion because credit business So Dr. John we give you the money to where are we?

Yes. Thank you very much.

I call out to those who are in charge in the room.

Okay. Thank you very much, Dr. Mwangi. The microphone goes to Sheila Mallowah. We've been very successful with our portfolio of SMEs within the foundation that we previously walked with and empowered and we've been able to track the empowerment journey and even how they've grown and become very successful. And we're able to track this 2 matrices such as, for example, the fast loan side, the growth in the loan size, the performance and the quality of that loan and some of our customers as well are very successful business ventures. So what we are doing is as Equity Group Foundation is a partnership platform bringing them on board to say that there's a huge cohort of young people that are also coming on board and are very interested in understanding practical business from those who've been successful on it. So we are setting up the business clubs and we're starting with the countries. And the Equity Group Foundation team led by the enterprise development and financial literacy team has already started setting the map in the countries. I think now we have 23 countries where we've done that, set up the business clubs together with our Equity leadership program, scholars who you've had -- you've had it mentioned that we now have 29,000 scholars who've come through the Equity Leadership program, going through the universities, studied in various sectors. So what next in terms of being entrepreneurs themselves and also creating opportunity for others as the Equity doctors, for example, have been very successful in doing. So [Sheila].

[Sheila], how do our customers get benefit from the craft? And introduce yourself, I don't think I've ever given you the mic.

Okay. Thank you, Dr. Mwangi and thank you, Dr. [John ] My name is [Sheila Mallowah]. I serve within the Enterprise Development and Financial Inclusion pillar and our focus is on capacity building of entrepreneurs, both at ideation at startup and even as businesses mature and scale. And we look to empower them so that they can be able to take advantage of the opportunities that existed in the group. One of the programs that we are currently running and implementing is the Young Africa Works program, where we have been successful, as Dr. Mwangi had mentioned, in capacity building over 565,000 entrepreneurs. When we look at [chama] and we look at the youth, we look at supporting them as mentioned in terms of how to generate ideas, business ideas, whether they're at university or whether they're just finished their education and would like to venture into entrepreneurship. And so we support them in financial literacy, entrepreneurship education and digital literacy to ensure that they have the expertise that they need to be able not only to just start the businesses, but also to scale. Once we have done that, we take them through an intense program of business development support, where we ensure that the learnings that they have learnt within the sessions are actually being implemented in their businesses. Once we're able to successfully do that, then we want to position them within the entire group through the entrepreneurship clubs to be able to participate in the opportunities that address, whether it's in the investment sector, whether it's insurance, to be able to take this so that they can be able to be strong and fortified businesses and that's what we're currently looking to do across all 47 counties in Kenya. Thank you.

Maybe one would ask how will this function and what support the level of sponsorship? The patrons are the executive, and maybe I will ask maybe my colleagues who have come from the banking world, consulting world, investment world to kindly start. He came from consulting, financial services, banking, insurance for that matter. Now this, as you can see, are the people who will be advisers. So one would not assume it is James Mwangi alone. We will have a curricula here, would agree and each person will take their regional crafts. And then we'll be part of that patronage of those club and have work -- a regular interaction with all the counties. We are focusing on young people, but we're also focusing on people who are in business with a special emphasis to our customers because we want to help them. This is for free. We are not charging anything. We are now saying if Anthony was advising James Mwangi, when he was in Pricewaterhouse, why doesn't he advise our customers. The best way not to charge is through crafts. so that what we will get in return? We'll get in the time lower risk for -- on our customers and may be better business opportunities from our customer, but we shall be writing the environment. Kenya will take a position. And if Kenya starts growing quickly because of dominating the African Continental free trade area space, you could imagine how much trade we facilitate. I guess the biggest opportunity for Kenyan traders will be DRC. You can see we are both in both markets and #1 or #2 in both markets. You can see the opportunity. So we are in part, we are motivated. We have aligned, and we will do it -- and as you have heard from Dr. John, we already have 27. So this will be the team. So it's the executive reporting to me that we'll be doing this with me and facilitated by the foundation so that we can bring partners. We may train and then get somebody like MasterCard's -- okay, would derisk that cohort, you have trained or that the members of this club will provide young people with a guarantee or will share their risk. The World Bank is a good partner to us. The IFC may say, we'll take share, so it's really opened the opportunities. But I think the most important thing is needed to help small, medium enterprises to formalize so that they can get efficiency and they can be very competitive. And we are doing this because we are ahead of them. As you heard from the European desks, it's about trade missions, and we are constantly taking the investors or the SMEs to the markets we are in, and they can explore the opportunities in those. So it's expanded the market. And lastly, I understand our IT team to make the technology group profit center, they want to create a marketplace. Now you can imagine a 100 million customers being a market. And then each of these traders is trading in that market online without moving goods and we are facilitating the payment and we are adding the goods being traded in the marketplace because we know all the players, we can -- and that explains to why we are pushing for public digital infrastructure, so that we can have a trading IT, digital IT. We work with the government to make that happen. So colleagues, you may see, refer to you as a banker. So there are many more who we are not studying. George, your question?

Yes, thank you for telling us that you have free consultants anytime we want.

Yes, Kenyans don't like paying consultants. That's why they have moved from consultancy to the bank.

You -- I worry a bit about the opportunities in the East Africa region, that it is the fastest growing region as we talk. And you are keen on leveraging ARRP with that. Talking about agriculture, what are the pain points that you wish to address or those that if only they were addressed, they would move quite a number of the masses to the next level? For -- to Angela, what is your secret in translating latent demand into real opportunities in the manner that you were told by [indiscernible] ? And [indiscernible] once he told us not long ago that the foundation has overtaken the business side in brand affinity and recognition, is that still so or are they still contesting?

As we said, the financial group has been struggling because of the shocks that we were talking about, but addressing those shocks gave the foundation and opportunity to seek partnership. So the pain of the financial group became the opportunity for the foundation. And if you look at the scaling of these programs so much, the fact that default was 40% of the default was because of a health incident to give the foundation an opportunity to see what it could do and it developed a solution of high quality, affordable and accessible health and it's now rated the highest in those 3 parameter provider. It's now the largest health -- outpatient health provider in Sub-Sahara Africa in just 5 short years. It has rated in partners and it has been challenged. The foundation has been challenged to prepare to set 1,000 hospitals in partnership with global community. They have also been told to prepare for 1,000 pharmacies. And we now have hired a Chief Pharmacy Officer, if you could stand and give a mic, and you can see that problem that was in the bank, while it was weighing down the bank it gives the foundation a huge opportunity. We've done that in the young -- look at young people. We're now seeing 60,000 young people. Now those are homes where the Equity brand leaves and we leave into official generations to come. So that is why -- and as we said, look at the clubs, how many people they need. The fate of those clubs is not a bank, is the foundation. So they are soft and because it's not a profit-making machine, including health Equity have here, the franchisee, the foundation doesn't make profit on it, then it brings out empathy. You're not paying, so it's empathy and then it's compared with I'm paying interest. So that's why the [indiscernible] But also, if you look at the slide and Alex, you can play that slide of the partners. The kind of partners, we've been able to bring happens themselves by merely associating with them. It's a huge conversation this one. And you can see how well they are categorized. So those who are in the banking to [find] the bank capital and loans, those who are finding the foundation and if you look their inclination is to work with the foundation. Only banking partner everybody else is with the foundation. Now with the Trump's decision to [cruise] U.S.A. we are seeing there are huge gaps. If you look at health in Kenya, look at education, we are saying, how can we fill those gaps. So we are deciding and maybe those who recently joined the foundation as associates, maybe you could start. Those who -- Associate Director -- and somebody can give them the mic. So we can start here. Now you start seeing even the capability we are thinking about just introduce yourself and what you have come to do in 1 minute.

Sure. Good morning. My name is Dr. Jaimini Kishore Gohil. I'm the Chief Pharmacist. What I have come to do is to enhance the availability of quality, affordable, essential medicines and with a partnership that's going to make the local manufacturers, the international manufacturers, the international relations to be able to...

And now that is manufacturing in the Africa recovery and resilient...

Absolutely.

And that banks with the bank. If you didn't think I -- people happy now. Equity has gone to medicine. It has not only gone to distribution but manufacture. And we are bringing international, we said, bring the world to Africa. We're bringing the biggest pharmaceutical companies and saying, we have a greater demand -- we get this only, if you manufacture in Kenya. That's how manufacturing is going to come to Africa, that's how jobs will be created by Africa. It's a very quite -- what do you bring -- what experience do you bring?

Sure. So I was working in the public and the private partnerships hospitals. So I was working as a Chief Pharmacist in Aga Khan University Hospital, Nirobi over a decade. I have worked in the coast general hospital, and I have also been a consultant working with private investors, IFC at World Bank to be able to bring...

[indiscernible].

Yes. Thank you.

1 minute is over. So if you don't use your minute I will...

Good morning, and thank you, doctor. My name is Dr. Patricia Owira recently joined the foundation as Associate Director for Health. Previously served as Deputy Country Director at the International Center for Reproductive Health Kenya overseeing the portfolio for reproductive maternal and health program...

So it is not -- it's not how much are these -- not bankers are doing it. Yet, the right people. So if you wondered where that 10% cost is coming from? This is where it is coming from. It's not Anthony alone.

And within the group, I'm looking forward to building and designing health programs in reproductive health, maternal health, child's health and also noncommunicable diseases, diabetes, hypertension...

And she is doing that strategy through that -- how do we -- we have done out patient. She's totaled [deliveries] 60% of all in patients are mother's delivery. I said, is delivering a sickness? Why today go -- an entrepreneur thinks differently. So we said why don't we do 4-star hotels, 3-star hotels and 2-star hotels where mothers can go to delivery in our hotels. And you bring the nurses and the doctors. They don't need to go and contaminate the newborns. In a secret environment where everybody -- where they -- persons they are sharing a bed with if we can then begin to deliver, we say, delivering a baby is not sickness. And should be done in the best environment possible. So we welcome the newborn in a special way in our hotel environment. So you can see the thinking. But who gives them choice, those who want, [Serena] okay. But it's just maternity, it's not coming to see as you know very well.

Good morning, everyone. Thank you, Dr. James. My name is Dr. Anup Das. I come with an experience of 30 years in health care industry. I work with world-class multinational pharmaceutical and medical devices companies like Novartis, Johnson & Johnson...

So that can tell you, we are going to manufacturing. He's the group director for health. Shift the strategy. We're not just going to do it [uprightly], but we are not investors in health. I do get investments to be done in the continent to the right people.

Last 14 years, I've been managing large hospitals in this country...

So if you find us testing these hospitals, so you call maternity then we go to -- John, you call them what diseases? Communicable diseases and noncommunicable diseases and critical. You say -- we really segmenting customers. We know who are in agriculture, who are in manufacturing, who are micro, who has more. So we'll bring segmentation in the health sector and provide specific solutions so that you are not paid for what you are not using. And you're not being put...

Thank you very much, Dr. James. My name is [Boniface Kinoti Gatobu] I'm the Director of Advocacy, Equity Group Foundation.

Now that is advocacy to bring partners for all the pillars in the foundation. I think at one time, which year was you voted the youngest member of Parliament in Kenya?

I was the youngest member of Parliament in the 11th Parliament that is 2013 to 2017.

And that is the advocacy, we need somebody who can be able to articulate that level. But now to partners.

My name is [indiscernible] Associate Director Food and Agriculture coming from the development sector and my experience in working with small farmers in commercializing their businesses, but also looking at access to input and technologies, but also working with small and medium enterprises in processing especially...

What do you bring experience and knowledge?

Yes, I worked in the development sector for the last 19 years. Working, of course, as I've mentioned with the small and medium enterprises in processing, accessing finance, upgrading their facilities in terms of how they are able to leverage our technology, but also...

Next? So George, you can see why the brand will be very powerful. It will be more powerful because these are also the links to their partners. They come in and then they bring the partners they have been working with.

Good morning. Thank you, Dr. Mwangi. My name is Joe Sanders I'm coming in as the Director of Food and Agriculture, within the foundation. [Harrold] and I have very similar experiences. I've been leading large-scale agricultural development projects around the world for the last 27 years and the last 10 years...

Large scale agricultural products globally. Give examples.

Well, in Zimbabwe, we linked 150,000 farmers to agribusinesses that we're exporting for high-value markets through contract farming arrangements and especially through long-term relationships with the financial sector.

So the question on transformation of agriculture. Now I hope, George, you're fully appreciated, but we are leaving nothing to chance. Agriculture is what transform Africa. Transform agriculture. Now the biggest transformation in agriculture is productivity gains. Production in Africa is a need of productivity in the world. So you don't need more land. What you need to do is to make the land to produce to global standards, 8x. As soon as it does that, that is no longer food for the family or the household or the shopping center. That is for the market. Get somebody to aggregate it and process it and taking it to the urbanize center and provide food for urban population. The [indiscernible] find a way for export. This team is to create value chains. These teams are the ones used to doing each year. So the capacity has been built. Remember, I said, governance and leadership was the fast one to address. That is now fixed. Now we are dealing with the capability. We have the fleet SKU at the delivery level. George, I hope we have finished the question. Dr. Angela, your question.

Yes, thank you, Dr. James Mwangi. I'm Julius Kamau, I'm joining the Equity Group Foundation as the Associate Director for Energy and Environment & Climate Change. And I bring on board about 23 years of experience in nature conservation, climate change resilience and sustainability. Thank you.

Before these, where did you -- or you got it from your abilities?

Not, definitely. Before this, I was -- I worked as -- in the public sector, and I was the Chief Conservator of Forests, Kenya Forest, obviously, the national mandate. Thank you.

So you could see we were saying very good. And you can see the capability. You don't deliver these transformation unless you have the right people. The right people, as I said, are in place now. We are now looking at each other lighting to the eyes and say, yes, you didn't steal from customers because you could have gone. Do you steal from the employer by not being productive. So we are looking at each other in productivity and saying, are you producing what you have been paid for. We are holding people to the contractual obligation. And the reason is to create the momentum of delivery. It's all about execution. We will have staff. You can have the best plan, but if they are not being executed -- so one of the biggest delivery for Anthony is a framework of measuring performance. And we are measuring performance from a commercial point of view. Don't tell us stories. Tell us what is the commercial contribution and quantify it to the P&L and to the balance sheet. That's the only conversation. So you find people running to go and give the farmers the loans because that is the only survival. You have to read it, give commercial value in a balance sheet and show it in profitability. If you give poor loans, it takes off the profitability. So it's quite really transforming the [indiscernible] is about performance. It's holding ourselves to a culture of customer centricity. It's dancing for the customer in what really they want. It's no longer about truly the advent of the customer being king, must be seen in Equity because that is the only way we deliver this plan. There was question.

Yes. Thanks, Dr. Mwangi. My name is [ Eric ] from Bloomberg.

[indiscernible] to answer your question. Answer them before we get your question.

All right. Thank you, George. I think the answer to the latent demand actually ties with what Dr. Mwangi talked about, the customer being king. One of the things about insurance solutions is that largely, historically, you have been supply driven but we've spent and invested a lot of time in understanding what the customers need and redesigning our products to ensure that they are customer relevant. So that's one of the things we've done over the last 3 years. I think we've also invested greatly in capacitating our teams. As mentioned by Dr. Mwangi, we do have a partnership with Equity Bank Kenya Limited. Over the last 2 years, we've actually been able to have over 1,800 relationship managers within the bank qualify in insurance, therefore, enabling them to be an astute customer adviser not only in banking solutions, but in insurance solutions as well. The last one I would say, which is something you'll see soon is really our capability to leverage on group infrastructure. One of the things that equity has done really well over the last 40 years, I build a brand that is loved and trusted. So the insurance business coming from a supply era, being able to sit in a strong brand, sit within a strong business with several branches, several team members and a strong balance sheet is what have enabled us to grow as fast as we have. George, thank you.

Thank you, Dr. Mwangi. My name is [ Eric ] from Bloomberg. My question is on profit growth and loan growth. So for the first half, loans grew at 4%, and there's a projection to double that by the end of the year. You're also forecasting faster quarterly profit growth. Will that be achieved by reducing the investment in government securities and adding customers? And what else do you intend to do to grow those 2?

Let's put it to [Brent], this Kenya, he's the one who have impressed us most. Used to be negative 10, I think he's now negative 1. So he's getting out of the hole. How are you doing it?

So thank you very much, [ Eric ]. And as Dr. Mwangi has mentioned, we've just started. The first half was characterized by a lot of efficiency gains, and that was on the backdrop of the macroeconomic situation that we are coming out of. As we look forward, and you've heard our economist mentioned, we believe now is the time that we are ready then to really engage the customer. We've set ourselves right with all the efficiency gains that we've done. So we are quite agile. We're also in a good position in that the macroeconomic environment has turned. And we now have ability then to leverage and allocate the bonds that we've held, which is a significant part of our balance sheet over 40% into reintermediation. The team has been set up to ensure that we then take full advantage of what the macroeconomic environment creates. You've seen private credit group from Central Bank being published indicating that there is now light at the end of the tunnel. We believe that will continue. The interest rates are increasingly coming down, which means then affordability of the loans would be there. The government definitely needs to deal with a couple of areas around pending bills and the like to unlock part of the SME. But as Equity Bank, we are ready now to ensure that our customers are fully facilitated in terms of what they want to achieve economically.

And maybe it's also having the right skill. Is the new Director for Agriculture in the room and mining -- give them the mic. Okay. Mining -- Director of mining?

My name is Cheyo Mwenechanya. I'm the Group Director for Food and Agriculture on the commercial side. Prior to joining Equity, I worked for various banks for 17 years, regional banks as well. And prior to that, I worked for the Minister of Agriculture for the Republic of Zambia in policy formulation and also providing extension services.

As you can see, we have combined policy and execution financing. And we trust that still the South African region is a food basket for the region. We're trying to [ follow ], but I think we have also realigned ourselves. Our former Chief Legal Officer has now become Chief Commercial Officer, deliver on those commercial targets. Do you want to add anything to [ Eric's ] question? How do you ensure? And why is the money coming? And how is it [indiscernible]?

Thank you, James. Good morning, everyone. I think the MD for Kenya has covered from a loan book perspective. Just a couple of additions to make. We're refreshing and revamping our digital lending capability. In the last few months, we've had some challenges with how that engine has been running. We're revamping that. As the MD says, we want to make sure that we provide credit to customers that deserve it. But at the same time, we want to do it affordably and to make it easy for them to be able to access that credit. I think the other thing that we're doing is on the NFI side as well. Over the last few months, we've been trying to look at ways to strengthen both on the trade finance side and on the treasury side as well. So we believe that in the next 6 months, we'll be able to see significant traction in those 2 areas, which should then support our non-funded income as well. I think the GCO wanted me to talk about the mining. We've been able to enhance our capacity with support on the mining side, particularly in the DRC, Tanzania and Uganda, I think, from what the economy says. We've recently acquired talent from South Africa from Nedbank and Total South Africa who's going to help us with defining our value proposition as far as mining and extractives are concerned. So I just thought I would talk about that as well.

Thank you very much. And maybe leaders supporting Gertrude is our Group Director for Product House. Where are we in these solutions for the customers? And introduce yourself. It was long since you last spoke.

So I'm Rene Kalonji -- yes. Okay. I'm Rene Kalonji. I'm actually in charge of all the product delivery and product management as well as actually the channels.

That is where the issue is. Do you have the right product? And broadly what we did, [ Eric ], if you remember, we came from financial inclusion. We wanted people to have -- to be banked. But we were not very good once they have been banked. They kept on graduating to the banks that have powerful solutions. They said, "Wow, who is the best in the world?" It's JPMorgan. We went and hunted for JPMorgan's Global Head of Product House and said come and do like JPMorgan. They have segmented the market, segmented the sectors. They have segmented on demographics, and then they are developing products for each. How many products have you developed and...

So the last 12 months, actually, what we call minimum viable product, 231.

In 1 year. Because we want solutions. Now's it's not on the inclusion. It's facilitating economic transformation of Africa by transforming ecosystems and value chains. Those must be solutions, which you convert a product into a solution for a value [ risk thing ] for a segment, for a sector, for an industry. And that's why the products are so many and broadly, the journey seems to be doing very well. It's leading now technical, and that is why it was not easy to transform equity because you have to have all the components in place. And I couldn't, for 4 years say we have transformed. I kept on talking about strategy. It's now at transformed. It's a different game board. When do you think you changed the commercial outlook of this bank?

Actually, it's coming because we see the -- actually with Kenya already, the uptick and all the other regions also are really taking the tailwind from Kenya as well. So I think we can see a double-digit growth quarter-by-quarter as we're going through.

[ Eric ], don't be disappointed by Moses if he don't -- still remain negative because Christine Browne, Special Assets, has told me, by the end of this year, his NPLs would have moved from 20% to below 15%. So she might be collecting more than he's capable for disbursing. But you see the change in coverage and the change in net interest income and of course, the bottom line significantly. Have I quoted you right? Confirm in mic. I want it to be on record. Let the camera capture you telling the investors NPLs in Kenya will be below 15% in the next 6 months.

Let me look at the camera. Good morning, investors. Just to reaffirm James' position, we have been on the runway for a very long time, and we can now see a pathway to recovery. We spent this time unlocking the web in the courts, and it was important for us to take that time. Being a systemically important bank, the kind of precedent coming out of the courts was very important to have it right because that will then inform decisions going forward. So yes, James, I support the position.

And if you are doubting, Christine, just check Tanzania. We gave her Tanzania 2 years ago with NPLs of 39%. They are now 2.8%. Early this year, we gave her Uganda, NPLs of 17%. You are now at?

Below 10%.

Below 10%. I have no doubt, NPLs in Kenya. I said 15% so that she can overdeliver, but I would be disappointed if Kenya doesn't go below 10% NPLs by the end of the year. Christine is grounded, a lawyer by professional, introduce yourself briefly. People need to know you are grounded.

Yes, I have a master's in law, and I am a certified mediator. I'm also a member of the Certified Institute...

So it's not just [ executing court ]. It's mediating and arbitrating between the bank and the borrower. That's why she's successful.

Yes. Thank you.

And she was famously known for structuring in the World Bank. For how many years?

I was at the World Bank and I was in the development banking world at EADB altogether for about 9 years.

So she has what it takes. And as we said, human capital, people underestimate the human capital we have put in this bank. You can't come and joke about transforming Africa. You can only speak about it. You have the right people. You have the right partner and you have right skills. The good thing is the layers of Equity will be the platform on which to be done, compute the balance sheet size, compute the P&L, if the platform will have 100 million customers. Last question? Yes, [ Kimodo ]?

I have followed your presentation very well, and I think there is no better time to be a member than now. Hopefully, we will continue hearing the good news. Now I have very, very short question. Number one, you have said that you are planning to reallocate the KES 450 billion from the government stock to the loans. Now considering that you have 13.7% of NPLs, hopefully, it is not going to go above that. And you are removing this money where there is no risk and putting it where there is risk. I'm trying to see how you will balance the 2 between removing the money from where there is no risk or where the risk is 0, bringing it where at least it is going to generate a lot of income for the bank vis-a-vis the risk involved in this KES 450 billion that you are reallocating to loans. Now number two, there was something that I had. I don't know how far it has gone about the government of DRC saying that you must cede some percentages of equity BCDC maybe to [ low cost ]. I don't know how far it has gone and how far have you been able to do that. My last question is on the ceiling of the loopholes. I know when this group is growing with such a magnitude, definitely, there will be so many leakages. And once in a while, we have had here and there about somewhere where there was a leakage. Now what guarantee will -- are we going to get our shareholders or as investors to know that as this group grow, all the loopholes are sealed so that as the technology grows, so grows the technology of those people who want to put some holes. So I hope that you have sealed all the roles or you are trying to do your best to make sure that there will be no leakage. I wish you the best, daktari, and I think when I grow up, I want to be Equity and you.

Thank you very much, [ Kimodo ]. I think let's go to shifting. If you look at the -- currently the yields on treasury bills, it's about 9 -- actually, 8. I'm told by MD Kenya, we are down to 8. That's what it is earning. If you shift it to lending and do SME, it will be 16, double. You have priced the risk. And there is a commitment from Christine. NPLs will be below 10%. Why? Because we have learned the lessons, and we have brought the skills and competencies. So I think banking is intermediation. It's not being a lazy bank, picking money and give it to government. It's really taking the risk of intermediation. So you better get it right and we have committed to getting it right. So -- and if you take a risk, it is very well priced, actually overpriced. The yields, you can imagine a portfolio of, what, KES 1 trillion, the yields going up 200 basis points. I'm sure it has sunk.

Yes.

Very good. The second one, DRC. I'm happy to say we wrote our presentation to the Senate, to the President, everybody, and I'm glad the Senate has ceded to our -- and that [ cross ] is being amended. So we are no longer required to cede. We're exempt -- We'll be exempt in that country like we are exempt in Kenya or any other country to be fully owned. I think I like the last question because it brings Beth, Beth now and Defense Council. Defense Council maybe you could be starting to stud those who are in charge of leakage. Very good. Let them, first of all, introduce themselves and then she says what they are doing. Very good. And what you are doing to ensure. You can hear shareholders are really worried about leakages and -- the left and right. I think, Ssegawa, you should be standing. You are defending us from people with the wrong conduct. Yes, quickly. And your experience quickly, what you do and what you -- experience you have.

Yes. My name is Naftali Mwangi. I'm the Group Director for Fraud Investigations and Security. I hold a master's degree in economics, and my experience is in the investigations and fraud management having worked in the DCI as [ investigator recent bank joined ] banking also in the Central Bank and we are the founders of the cyber-crime units, the DCI and the crime and intelligence units and the Chair of the Kenyan Banking Association.

And you can see he's next to the door. In case he's required out, no struggle. Next there, credit risk quickly.

My name is Sam Gitwekere, Group Chief Credit Officer. I hold a master's -- MBA and I'm an associate at Chartered Bank, 44 years in the industry, over 20 of those in leadership. My role is to fix the credit underwriting. And we have brought in senior resources...

The senior most banker we have within the group, 44 years of banking experience. In where and where?

I was Chief Risk Officer for Standard Chartered for 7 years. I was Chief Commercial Credit Officer for Barclays out of Dubai covering the Africa region for 4 years.

And then Asia, where?

I was in Bangladesh. I was in South Africa.

So he brings in credit risk. This is what we were lacking. As I said, this transformation was about having the right skills, the right competencies. Yes, give other people -- pass on. Yes.

My name is David Ssegawa. I'm the Group Director, Human Resources. I bring in 30 years of Human Resource leadership at FMCGs, telcos and African Development Bank.

Which ones? They are known by names. Employers are known by names.

I was Group HR Director at Unilever, at Coca-Cola at Airtel Africa and African Development Bank.

And that is the experience David brings. You can see, when David steps in, he said enough is enough, let's do the audit of conduct. Now he has said, yes, we have dealt with those who were stealing from customers and making loans unaffordable. What about those who steal from the employer? They come and hang their coat. They come and they keep long queues because they are not processing. We can catch them by saying this is the number of transaction per day, and I can't wait to see these. So once you get the right people, nothing happens without an aside. If you look at all the incidences you talked about like leakages, there's a staff we have taken to court. There's a staff we have taken to court. So we are cleaning the house. And we'll clean it thoroughly, thoroughly, thoroughly. And never again will it ever happen because once one finger is soiled, it soil all the others. And that explains to you why we have taken the approach. You can't make a promise to the market and then undermine the market. You can't create a brand and then undermine the brand by what you do. So you can trust that if leakages is from people, we'll deal with that. If leakages is from fraudsters, Naftali will deal with it. If leakage is from credit, Sam Gitwekere will deal with it. Yes? Yes, it's on.

Directors, shareholders and colleagues, my name is [ Patrick Notye ], coming in from telco side, worked for 24 years in telecommunication and fintech as well. I am the Director -- Group Director for Non-Financial Risk, acting CRO currently. Basically, what I'm bringing in is I conduct risk -- done a lot of work around revenue assurance, which is where the errors are omission, not a commission; done a lot of work in fraud management domain as well as actually looking at the fintech in terms from a risk aspect. Thank you.

Very good. And the last one we have asked him, not seen after you have diverted us, why don't you also help the customers who are being defrauded by being socio-engineered through calls. And we are now using algorithms and AI and hopefully, we'll be able to stop this problem in this country.

Paul Wafula, Group Director for Internal Control and Compliance, been with the financial services for 27 years, having worked with [ National ] Bank in Africa, Middle East and Asia, looking after risk and policy.

Where those risks have been controlled, we have brought the people inside. I think, [ Kimodo ], the best I could have done is to introduce to you the team that we have assembled. As you can see, it's not promotion from within. We have no time to train. Get the best from the world. We can afford it. The amount of money we have lost in fraud is too much. It could have paid these people. But I think the problem is not the money. It's the reputation. Are we the safe, secure place is the brand. So if you see us using a hammer to kill a fly, it's because it's hurting us and hurting us where it pains most. It's brand. It's [ Captcha ]. And I said the last time I will not speak again is doing and we'll continue to do. Internally, we will be clean, clean as snow because we have said let's deal with it internally. And it doesn't matter if [ Captcha ] will change and everybody must know it's a contractual obligation. We have been too -- family for too long. We will now be customer centric, market-driven and professional in our dealing vision within the group because it has hurt us most. It has hurt us most. So [indiscernible]

My name is Thelma Kganakga. I'm the Group Chief Information Security Officer. So my role is to secure the systems of the group. I've been in cybersecurity for over 20 years. I've been the Chief Information Security Officer for about 3 banks in South Africa and telecoms.

You can name them.

FirstRand, ABSA, UBank, South African Revenue Service, MTN, looking after Africa operations.

And Thelma has really done her work. When all organization in Kenya were being denied services by whatever it was, she did what she did. But that is being coordinated by Beth. Beth, you made the people who you are, what you bought. And I think you have switched off. Yes, go on.

Yes. Thank you. Dr. James.

And give shareholder [ Kimodo ] assurance of his fears. He can see money now starting to come, but he's not sure whether he'll receive it or it will be intercepted through what he called leakages, loopholes.

No. We will give that assurance. My name is Beth Kithinji. I'm the Group Chief Internal Auditor. I joined Equity last year. Before that, I worked for Central Bank of Kenya as adviser to the governor but also in charge of internal audit and risk. Before that, I worked for 16 years with KPMG, both here in East Africa and the U.K. in various capacities. I began as an external auditor. I did advisory, was Head of Quality and Risk Management for East Africa. Just to give assurance, we -- together with my colleagues, we took on the challenge to make sure that we preserve value for the business but also more importantly for the shareholders and investors. And we looked at it in 3 aspects, looking at it from a people perspective, and that's why Dr. Mwangi asked David to speak about culture and his role in transforming our culture and maintaining professionalism and integrity of our staff, which is 2 of our values. We looked at it from a process perspective, working with the operations team, one, to process engineer, carry out process engineering but also transaction monitoring. Right now, we are able to see any transaction that happens across the group as we monitor all transaction. We are also looking to automate and create efficiencies in the processes making sure that we digitize the process. Lastly, on the technology side was looking at -- we are currently implementing 2 systems, a fraud management system and a financial claim system, which are top of range, used by global banks across the world. And that will really improve our fraud management and financial crime capabilities but also on the cyber front, improving our capabilities. Right now, as Thelma mentioned, we are doing well on the cybersecurity front. And lastly, the use of AI, which we cannot run away from in terms of from the technology side and also from a process side. So I want to assure you, shareholder [ Kimodo ], that we are doing everything possible. We have seen improvement, significant improvement on the fraud management in terms of incidences, both internal and external fraud. And right now, risk gives everyone responsibility. Everyone has a key performance indicator on how they manage risk. If an issue arises in your area and unresolved audit issues or delay in audit issues, it's a direct impact on your pocket. And so that understanding of the cascade of risk to all team members but also ensuring that as an entire team, both down from the teller to top leadership that risk is on everyone's mind. Thank you.

I think consequence management has really worked and I forever thank David for really introducing. It's not just the top line that we have really invested in, is the next lines or next layers of staff. Solomon, maybe you can look at Mr. [ Kimodo ] and introduce you because he needs to be really assured that he can see dividend and then if it doesn't go to him because somebody picked it before it reached him.

Thank you, Dr. James. My name is Solomon Abiakalam. I joined the group about 4 years now. I joined from HSBC and also Standard Chartered, and in those places, I looked after compliance across a number of African countries. So at the moment, I'm sitting in EBKL. That is this Kenya subsidiary and I'm also supporting the group on the compliance. So shareholder, I can assure you that your investment is secure. Thank you.

Yes. So as you can see, there is the first -- I think everybody who talked, most of them, were the first line of defense, embed risk management in how we do things. Then there is the second line, I think [ Notye ], you're in the second line, risk, managing risk. And then there's the last line of defense, which is Beth, audit, which reports to the Board. And what we have seen is that those 2 have really aligned well. That's why they're coordinated by Beth, and we really are impressed what people can achieve they work together and they align themselves properly. So we call that the Defense Council, and I can assure you I'm now sleeping. So you could also start sleeping. If GM is sleeping and he's passed on the responsibility, our shareholder, you can sleep because we have managed that. We have brought it under control. We have to reinvent ourselves. We have to bring the tools. We have to invest, and we have to bring the right people. But it's not just bringing the right people. Our first ELP scholar, Sam Kirubi, all you know, has been with us 28 years. There's a question of commitment. We saw his commitment very early. So he was in the team that went to open South Sudan as Director of Operations. We saw his talent. He went and -- as Managing Director to open Rwanda. He went to Uganda to transform Uganda. And then we say, he can [ sub ], he can initiate or start and he can grow and he can transform. And we said we have had too many problems with the systems and operations. And we said, Sam, you are not an engineer. You are not an IT expert. You are not a processes person, but this is the task we have. I just want to give him the last 5 minutes to brief you on what in 2 years we have achieved in technology. As you can see, none of you have asked any questions on technology. We can all assume it has become hygiene. Stability of systems have become hygiene. The question is how did he do it. Now we have said to him every process must be digitized. We must remove human interaction. And we must [ sieve ] every process using machine learning, and we must test that using AI. And so what he has done, he has installed next-generation system for industrial technologies, digital ready, machine learning ready, AI ready and now it's really applications to handle those capabilities. And it's been done by a banker, not by a technology person. So the -- we've seen people with the wheel. So we also look and measure the attitude of a person. What is their natural attitude towards work, to do a purpose? Are they aligned to the purpose? So Sam, last 5 minutes. If I don't speak to you after this, I thank you most sincerely for giving us an opportunity. Sam?

Thank you, Dr. Mwangi. I think I want to start by thanking the shareholders and also our customers for being patient as we renewed our infrastructure for the last 2 years but also to report that where we are currently, we -- almost at the end of that stage, we did request for some patience when we were having instability on the systems. And basically, what we did was to do the infrastructure refreshment exercise but ensured that we renewed around 4 stacks, our compute capability. We also renewed our storage capability. We also did our networks but also did great work on the information security stack led by Thelma. And maybe, Dr. Mwangi, with your permission, Thelma and Michael should stand as I speak because they also played a key role. I don't know whether Michael is in the room. Yes. So that ensured that the stability that we are enjoying but also the availability and security is guaranteed and not only from maybe a current environment but also giving us headroom for the next couple of years, maybe 10 years. Michael would say, from a compute capability, we moved from coverage levels of 97%. We were breaching almost 90% of our storage. And now with all the operations and transactions growing, we're not even hitting 20%. We are in the 10s in terms of the storage capability.

And the number of transactions have increased from 300,000 transactions per day. Yesterday, we did 22 million transactions. And we're only using less than 10% of the capability. So when Sam says we have now secured the future. The 100 million customers, they come. We don't need to invest in the future. So any new customer, the unit cost of IT goes down. The cost-income ratio will go on 1 direction for the next 10 years. Why? Because we have flown through there the cost and then it's investment. You have said Michael is in the room and he keeps on saying give Michael -- put this in technical jargons and introduce yourself.

My name is Michael Kwofie. I'm the CIO for the group. I take care of the technology strategy and the development and the rollout and execution. Prior to Equity, I worked with Standard Chartered Bank covering the African market and with Ecobank Group as well also covering the African market. And prior to that...

And what have you achieved in summary since you came or since we -- you paired with Sam. I don't know about before summing with Sam.

All right. So since I paired with Sam, we did a complete overhaul of the systems in terms of what you describe as changing the wheels or refueling whist we were in the air. And we've been successful at that. It's not been straightforward path, but we've been very successful. And now for all the core systems, we've been able to move them onto new infrastructure that Dr. James has described. And they are working as expected, and they are ready to take on additional load. So I'll leave it at that. Thank you.

Engineers have very few words.

So yes. And also the good work we have done is to ensure in all the markets, we are the geographies now. We have been both primary and the DR data centers now, almost what you would call active, active. So we used to have more or less supporting market from Kenya, but that has been extended, markets like DRC, Tanzania, Rwanda, Uganda, all of them now have got their instances to support all the licenses operating from that side. Maybe shortly, the next level and where we are spending a lot of time is on digitization. And what we are doing on that is to ensure consumption of financial products and services even. The socio part of it is digitized. I was happy to see in insurance almost 80% of the product consumption is through technology, what you'd call even online channels, and that will continue. But also, we are orchestrating all the products within the channels, making it very easy for our customers and layering that with AI such that our customers, their availability and personalization becomes very key. At the back also, the reengineering process has started, and these are more forward-looking processes, both from the customer side but also from the operations side. And what that brings to investors is efficiencies because on the customer side, we are looking at moving from an average of product consumption, 1.2 to around 4 products. And the cost or the unit cost of delivering that will be very low. And on the defensive side, Director -- investor [ Kimodo] already talked about sealing the loopholes. That's coming on new technologies that have started being rolling out. So it's just the beginning, and what you're going to see is the efficiencies brought by that transformation. Thank you.

[ Excuse me ] apologize but bear with us. I will explain to you as I personalize my apology.

Thank you, Dr. Mwangi, and thanks, everyone, for listening and tuning into our half year 2025 results. As you leave, you'll have a copy of the investor booklet. Kindly ensure you pick one and also a copy of the press release. The results are also hosted on our website, and we continue to interact with our analysts and investors as the week goes by. Our investors call will be on Thursday at 4:00 p.m. Kenyan time. I want to invite Reverend Evans to close for us with another prayer. And I also want to remind our guests once again that after this, breakfast will be served. And we are very grateful for your attendance and we look forward to another great half year of 2025. Reverend Evans?