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

As we remain standing, let us pray. Our heavenly father, we want to thank you so much for the gifts of this new day and for bringing us together, Lord, even as we receive Q3 performance. I want to thank you, Lord, for the fire that you have brought us. We want to invite your presence to guide our discussions, your wisdom to inspire all our decision and your peace to dwell among us. Heavenly Father, we want to commit our [ GCO ] before you even as he leads us in this. Grant him clarity of mind, continued strength and discernment and may your grace continue to abound. We also want to take this moment, our Father, to thank you for our investors, all the shareholders, service providers and partners for their continued trust and collaborations. We want to also thank you for our customers in all our markets, bless them abundantly, oh god. We also want to thank you for all our employees, whose dedication and commitment has made us come this far. We commit this meeting in your hands, may your kingdom come, your will be done now and forever more. In the name of the father, the son and the holy spirit.

We may take our seats. Once again, we want to thank all of you for coming. The release of the results is also being streamed live on all our platforms and for the investors and analysts who are online, the questions that you might have kindly feel free to post them online. We'll be able to respond to them. It's now my privilege to invite our Group CEO and MD, Dr. James Mwangi to take us through the Equity Group Holdings Q3 2025 results. Welcome Dr. Mwangi.

Thank you very much, Alex, and a very warm well welcome to Equity for an adequate Group Investor briefing. We're glad to have you this morning. Today, we are privileged and I want to recognize, in a very special way, among as the presence of the group chair, Professor Macharia; the chairman of Equity BCDC or equity bank in DRC, [indiscernible]. And maybe as you might see, presenting these results with me is the Managing Director of Equity, BCDC, [indiscernible]; and of course, the Managing Director of Kenya, Moses Nyabanda. So ideally, Alex -- ideally, they say [indiscernible] is when opportunity, [ our cash ] and meets preparedness. That's when you say you are lucky. These result the theme who will be convergence of preparedness of Equity group through a strategic transformation and a changing macroeconomic environment and we will [indiscernible] how the water level is rising and they say when the water level rises all boats rise. We see as if that's the situation macroeconomic. We have gone through a very difficult macroeconomic environment for quite some time, but there seems to be a significant change. And that is preparing an environment suitable and good for business. when we analyze it, it looks like it will give Equity group a long land width and a very strong headroom to be able to prosper. But we would not have been able to take advantage of that opportunity if we were not well prepared. So the 4 or 5 years of strategic transformation. We see where it has positioned us. We're in the right place at the right time. We are committed to it. So we think we'll be quite well positioned. And that is why the theme will also forecast on our two regions, Kenya, where the group originated and the region represented by DRC, of course, supported with the other countries, Rwanda, Tanzania, Uganda, South Sudan. And we have been talking about strategy of expansion. We also mentioned because we have gone public, where would we think we can look at those countries, how they are performing. So [indiscernible] that it is it. And then, of course, we want to highlight that while we focus on regional expansion I would like to draw investors to our diversification from banking into insurance. And that is why the Managing Director of Equity Insurance Group, Angela, is also on the table so that they can physically present the forecast that the brief will be all about. So if we can go straight then to the issues. When we look at the global macroeconomic landscape because it's in context, we can see where we are global. We look at December 2024, for -- it's incredibly powerful. But now the GDP of the global economies is lower than the market cap of the stock exchanges. It's a -- and broadly what that means is the private sector has become bigger than the public sector and that really positions what we have been advocating that if the private sector is bigger than the public sector, that it's the responsibility of the private sector to finance development. And we have called it the global transformation through private sector-led development financing. The old model of it is [indiscernible]. The old model of public sector development financing is stalled, it's not doing well. And so the world needs to reposition. And you could imagine then what that would offer a well-positioned forecast financial sector if it's the private sector that will finance development. That is how big the opportunity is. That's how we see it. But when we look at the economies we are operate in to come back home, you don't know what you can have a global view, but act locally. We are very well positioned that we operate in economies that are powerhouses in the African continent. If you look at Africa's fastest or the World's 20 fastest growing economies, 9 of them are in Africa. But if you look at those 9, DRC, which hosts our second largest franchise, is there and I don't think there's any country in the world that has momentum to sustain growth for a long time like DRC, no country in the world is better positioned. It was already this week that the World Bank released the valuation of the Congo Basin forest and valued it at KES 23 trillion, that's bigger than the GDP of the U.S. That's just the basin. If you then valued the energy of [indiscernible], we revalued the mineral resources of DRC. That tells you the opportunity at equity positioning itself and having 24% of the market share in means to us. So I'm contextualizing this position. If you look also closely, you see Rwanda towering very high. And that again helps to diffuse perceptions. We asked from media DRC and Rwanda, fastest-growing economies, Africa, among the top 20 in the world. So there's perception and there is a reality, and that is why we thought for the investors, we should bring the picture of reality that we could be able to address. Our Managing Director of Rwanda is in the house, Hannington, maybe you could -- again, so we could lead a seat. What does that mean for us? It means the opportunity. I'm not sure why Uganda is missing here. I believe it should be there. But we're also happy that our aspirations to go to Ethiopia [indiscernible], that we can all see where Ethiopia is in the top 20 fastest-growing economies in the world. And if we then look at -- because it's one thing to grow, but is that growth having impact on the rise of the people. If you look at GDP per capita, because that is our per capita GDP growth rate with -- and it's not the number, it's -- the number is what it is, but what is the trend? And we see long term, these economies, GDP per capita. They are growing quite fast. We see Rwanda there, leading the pack. We see a Ethiopia second, we see DRC there, we see Uganda, we see Kenya growing faster than the GDP capital for the United States of America, despite the innovations. This is not innovation-led, this is real economy. And when growth is anchored on lead economy, then it's very sustainable growth. So we see we're very well positioned the markets we are in are pretty good, even South Sudan this year promising to reflect. But when this region is put into perspective to the global and we look at the Eurobor board dynamics around the world, we see what is happening to the yields of Kenya and Rwanda, and suddenly the global economy has become attracted to the emerging markets and particularly the East Africa. You may have a very good story but if the story is not bought by the global economy, it remains just a story. But when it is bought by the global economy, then need facilitates, trade and investment. And we can see the rally that we are seeing in terms of -- and particularly for Kenya, and we are celebrating that particularly the banking industry, the leading banks this year have registered above 50% appreciation of their value, and it's simply because there is a demand pull on the investment, and we are glad to be to that level. Then we look at the estimates of IMF in terms of GDP for 2025 because it's also important to look at the size of the economy. And if you look at that and then compare it with Africa, we are excited that the countries again, we are in make it to the 15 top economies. If you look at Kenya as the #6 largest economy and anchors. People should not underestimate Kenya's position as the sixth economy. If it is allowed by extremely fast-growing economies, that will, of course, adhere to Kenya and Kenya hopefully will be able to do. We look at Ethiopia, we look at Tanzania, we look at DRC, we look at Cameroon. What does it mean? It means majority of the economies we are in some of the largest economies on the African continent. But it's not their stand-alone size that matters is that they form a block the East African community. So when you look at the trade of the East African economy, it's what it is because it's big economies, Uganda, DRC, Tanzania, Kenya, and we are glad our neighbor Ethiopia, and that's why we are attracted to Ethiopia. There is a rationalization of every strategic intent. And lastly is what -- whether the government has the capacity to sustain that momentum and can we dissuade the fears. And when you look at interest payments as a percentage of revenue, Yes, we talk of that, but look at Kenya, look at which Kenya might be and Uganda, they are within 30% and we can see economies that are going all the way 60% to 80%. And this is IMF data, suggesting that the economies we are in may not have the capacity to ride over the shocks that they are all going through. The situation from data is not as bad as truth. So that is the environment we are operating in. It can be better, but we comfort ourselves, it looks very good. We haven't had this kind of environment for quite some time. But we ourselves have been really preparing for ourselves for the future. But this macroeconomic environment has brought us the future very, very close and found us ready. Why are we ready for this environment? Because the last 5 years, we have focused on transforming ourselves. And if you look at the equity transformation journey, we have transformed the strategy. We have transformed the old strategy, our governance structure, our customer offering, our systems and processes and our people. And I want to really thank our customers for their patience and understanding during this transformation. When we were changing systems, we knew of instability of our systems. That is behind us. When we were making our human capital fit for purpose, there was pain that is behind us. When we were looking at the customers' offering, it was -- we did inform our customers with focus group discussion, what type of products would you wish to have. And when we were building the governance structure, it looked like a long wait. And I'm really glad that we have been able to reach this stage. And this has really positioned us pretty well in terms of governance structure. If you just looked at the governance structure, the -- that is what the transformation has made us look like. It's no longer the Kenyan bank. It's a financial group that is a technology company with an MVNO license, with a PSP license for payments with e-commerce capability using APIs and with significant digital capability. That is now built. The systems have been bought. If you look at the bank, we've really extended the bank into -- and the more important thing is not the number of countries we are in. What is important is that we are significant and systemic in every country we are in, positioning us for cross-border trade. When you look at the insurance group, we now have the full suite of insurance licenses -- we can insure life, we can insure health and we can insure wealth. And there is no better position. And lastly is that we are able to work with the communities and ensure nobody is left behind through our foundation in areas of social innovations, in entrepreneurship, in agriculture, social protection, education, energy and environment and health. While most people see this as the generosity of the Equity Group, we see it as the investment of Equity Group in communities. We want to use the position that we have to capacitate at least every person who has a dream through entrepreneurship, training, guarantees so that they can participate, they can insure their health, they can insure their life, they can insure their wealth after they have created them using banking tools and doing it so conveniently because of the technology capability that has allowed us now to offer 24-hour banking and compressed distance and time wherever you are, whatever time it is and our ability to bring convenience and ease using technology that is tailormade to the needs of the people, including those who are being listed by the foundation. Seeing it not as different, but seeing it as a 2-engine model, social and sustainability and economic model, a 3-engine, that transformation has been long coming, but we are glad to say it is in a position that we could. And that is why we unveiled the dream, the African Recovery and Resilient plan and say now that we are ready, we could be able to set ourselves huge ambitions. And we set what looked like a dream that can never be made to become true that we will be home to 100 million customers by 2030. We are glad that the universe has conspired to make that possible. The macroeconomic environment is ready, is enabling and the transformation of equity has made it ready for that opportunity. So as you see, we have said the best way of looking after people is focusing on food security. The best way of transforming Africa is transforming agriculture. We have set ourselves an ambitious ambition of getting to 30% of our loan book being in agriculture. But we also know that young people may not want to do agriculture. We want to industrialize this economy. 65% of all our loans, we have targeted them to SMEs. It was very hungry, very flattening last week when the Kenya Bankers Association decided to print a scorecard for the banks in Kenya on their participation in supporting micro, small and medium enterprises. And we realized from January to July, we have done 45% of all SME loans that have been done to Kenya. I've never had such a beautiful moment in my life. To realize we transformed the bank, but we never changed the objective. The true north remained that we exist to expand opportunities for wealth creation for our people. For Kenya, for Uganda, for Rwanda, the African entrepreneurs are in micro, small and medium enterprises. And those are the people we have focused on and single hundred when you do 45% of an entire industry, in a field with [indiscernible] banks and you feel proud that yes, you have not lost the eye, the boom. You have focused on your purpose of changing lives, giving dignity and expanding opportunities. So again, we also want to say we don't want to remain micro. We want our people to graduate to manufacturing. And we have set ourselves a very ambitious target of ensuring 15% of our loans is in the manufacturing sector. And more importantly, what we have set ourselves is not a number for trade and trade facilitation, we want to be the biggest trade because that's what will create wealth. It's when goods and services are being exchanged, they are being manufactured in our region. But the target of 100 million customers looks now more of a reality even ahead of time. And if you look at the scorecard, how are we doing? We take pride that well, by 2025, we ought to have reached 14% of our entire loan book. We are at 11.5%. And when you look at 11.5%, some countries like Kenya, and I'm very proud of Kenya, it is at 16%. And this is because the African recovery and resilience plan has been domesticated. So Kenya has led with agriculture and we see DRC has led with mining and corporates. And you see each country is becoming stronger and stronger in what it has a competitive advantage. Uganda has decided to go to health and our largest loan book in Uganda is starting health and hopefully, Uganda aim of becoming the India of Africa will be realized through the supportive initiative. Manufacturing, we are still low. We ought to have reached 8%. We are at 2%. Borrowing customers, we need to have reached 900,000. We have reached 300,000 businesses. This to us is -- and we put this to the public so that the public can hold us to account. This is transparency of a dream. It's not how you are doing. It's you want to work with the customers, you want to work with the public and say, let's change Africa. And Africa will be changed by ambitions. If you look at SME, this is where we are doing very well. We expected 49% by this time on our journey to 65%, we are at 40% of the entire loan book being in. And where we have performed pretty well is total unique customers. By now, we had anticipated we will be at 20.6 million. We are at 18 million customers. So we feel the target. So the question is how do we convert our 20 million customers to borrowers because that's where the issue is. And that is why we have formed a formidable team of 200 people product house how do you develop products that helps everybody to borrow. And I want to appreciate Rene. Rene are you in the house? Who is heading this team for doing a starting job, and we believe that a target will be reached. And we have talked about in the next slide that this is what reading to SME would look like. The support is 65% of the entire Platina market. We hope this will be replicated that will be 45% of all SME loans in DRC, in Uganda, in Rwanda because that's the face of the African entrepreneurs. That is the face of African capital mobilization. Those are our ambitions. But as the transformation takes off, we are seeing the dashboard of the balance sheet optimization and efficiency. As you really do the change, the issue you need to deal with is optimization. And the big story, and that's why we are showcasing Kenya is look at what Kenya has done. Everything is green and everything is looking up. DRC, everything is green and looking up. And so they have won their place on the high table. I want to encourage the MD of Uganda. You are doing well, but you have won net interest margin. I want to encourage my friend, Huntington, there's a lot of work to do. You have to turn the 3 parameters, Tanzania, Isabella, want to go. It has to be done, it can't be flat. It is to go up. And we are also happy that South Sudan, despite the environment can still be on the dashboard. Sometimes it's presence that is important. There is a future that we could. But let me do a deep dive on Kenya because if you miss the transformation of Kenya, then you have missed the story because as we saw, it's the sixth largest economy. If Kenya turns around and we support it and it increases its market share from 14% to 15%, that will be a very different story. Getting just 1 percentage point of the market share. That is what Kenya is all about. And we see Kenya, the balance sheet is not growing. This reflects the market. The market is going through very difficult environment. Customers are not borrowing. Our loans are going down. Deposits are not significantly growing. It's a flat declining balance sheet, reflecting the environment. And we are hoping the weed of change will also touch Kenya. We are trying very hard to give loans despite the loan not growing, the loan deposit ratio is improving. So we want to say we have this KES 1 trillion. But look at our, our adding is only KES 400 billion. We are left with 100 billion, which we are keeping in cash. I want to appeal to Kenyans that we understand the environment. But the most striking thing is that despite that challenge, maybe one slide back, Alex, Kenya is improving the quality of its loan book. That is the earliest sign of a green shoot that the environment may be looking at the balance sheet, but they hope things are changing. If you look at our NPLs, they peaked in the first quarter '20. They peaked by August. They had come all the way to 22%, but we are now at 18%, and we are optimistic that number will continue. So if you see the quality of loan book starting to change in the market, it means that there are green shoots that are allowing people to pay their loans. So the balance sheet is what it is, but the transformation of efficiency. The improvement in reducing loss has seen Kenya transform itself from revenue. Efficiency has increased its revenue by 22%. It has increased its nonfunded income by 12%. And you can see efficiency ratios, yields on -- despite reducing interest rates for customers, the yields have improved significantly because of cost of funds. So when the government decided to lower its borrowing rate from 17% to calendar 10%, 12%, the cost of funds went down and net interest margin has driven Kenya. The cost-income ratio of Kenya. This is the most -- one of the most significant achievement an MD can deliver, moving cost-income ratio last year, 57% to 47% from December cost-income ratio from 61% to 47%. What does it mean? That as at December, for every KES 100 of revenue Kenya was making, it was spending KES 60. For every KES 100 Kenya is making now, it is only spending KES 47 and keeping KES 53. That is the transformation that people might have read. And we can see Kenya has bounced back to the pre interest capping era of 2015. The last time we saw 4.2% return on asset was 2015. And that is why we have said the turn out of Kenya is incredible. If you look at the return on equity, Kenya is now at 28%. And if it was not for the significant capital increase, Alex go back to the last balance sheet. If we look at capital, shareholders' funds in Kenya last year this time was [ 126 ] -- to date, it's [ 171 ], yet the return on capital has increased that significantly to 20%. So it's really a significant increase in capital, but a significant increase so that story -- but when Equity was doing a return of 4.2% in 2015, it was growing 10x every 5 years. We hope that is what the story will be. But even if it doesn't grow 10x, during COVID, it grew 3x in 5 years. So we are hoping that level of growth so significant because of the sheer size of the balance sheet as we have seen. And tax -- profit before tax goes up by 50% and profit after tax in Kenya grows by 51%. That is the transformation that we are seeing in Kenya. Let's go to [indiscernible]. I don't know how long we you want to be [indiscernible] second largest subsidiary, DRC, which we said has incredible -- and this -- the story of the balance sheet here is much better. Loan book has grown by 19% balance sheet has grown by 7% and the loan-to-deposit ratio. This is where value will be created. When you turn cash into loans, and we have started seeing asset quality has remained constant at a high number. We hope it will be below 3, like we will see in Rwanda and Tanzania, and we are very optimistic. The unique thing about DRC is that it has a 100% cash cover for any loan that is in arrears. We have not been able to see any other subsidiary do that. So its profitability is a very conservative accounting. Where you say in the room that, I don't care about securities. I will make 100% provision before I make my -- and hopefully, that is where Kenya should aspire to be. We looked at Kenya, Alex back to Kenya coverage. We see Kenya is at 60%. It needs to improve, but we are optimistic it should be. So BDC equity BCDC, as we call it, when you look at P&L, again, profit after tax is 18% if it was at constant currency because there have been devaluation, it could have been 24%. So it is transforming growth of 19% into 24% profit. And as we can see, return on assets moving from 2.6% to 3.1%. And despite the growth return on average equity, again, growing by 23% an enviable position, we see stable yields on asset, stable cost of funds and stable net interest margin. Our cost-income ratio is a huge opportunity. Hopefully, we'll see that go below 50% and we can do that by the end of the year. And that is the rival we are encouraging between Equity Bank Kenya. My bet is that -- and I hope Chairman, I can do this bet that by 2027, DRC might be bigger than Kenya, have made better delivery for us to be made very good friends. So essentially -- and why are we betting on DRC? Because of what we saw, DRC, the potential is the ability to -- and our preparedness and our capability to unlock that potential, it can be significant. We are the oldest bank in DRC. We were registered in 1908, and we have presence in all parts of the country. So we would have no reason. And we have the strongest brand in DRC. But more importantly, the government of DRC which would be the biggest customer in the country, owns 12.5% of equity BDC. So it's our shareholder. So we are partners with the government. So if the Chairman and MD work together closely with their shareholder. And we are the only bank that the government of DRC has shared and that you can see what it means. It's an investment in partnership that we do. And that leads us then to move to Uganda. And of course, the balance sheet shrinks quickly from Kenya is now headed to KES 8 billion is at KES 5 billion to KES 6 billion is very, very impressive. Uganda, the balance sheet like Kenya is flat, both at customer deposit at the balance sheet. But we are excited that it has focused on quality. And yes, they are migrating cash into loans. The earnings, we expect the earnings to start improving. But the most impressive aspect of Uganda is the focus on improving on loan quality. So we have moved from 21% NPLs. We are at 8.8%, and we are optimistic that by the end of the year, no pressure to you, but we should be below 5% but we can see what efficiency can do. You may not grow balance sheet. The P&L of Uganda is very, very impressive. Profit have gone up by 46% and simply because of efficiencies. And now the story is growth. So we have 2 subsidiaries that have unlocked efficiency are positioning themselves well and there is a story of growth in DRC. And we can see Uganda moving closer to where we expect it, return on average assets at 3.4%, return on equity at 24%. We price capital at 18%. So all these subsidiaries are now very far from the cost of capital. So it's growth that is very significant value creating. And that then leads us to Rwanda, and this might be the in which the balance sheet are, again, a story of significant growth. So Rwanda and DRC are competing in growth. Customer loans in Rwanda growth by 34%. What we said reallocation, we see it continues to hold the price of the subsidiary with the best loan book, continued discipline because it may have been joined by Tanzania at 2.8%. The part of the transformation was quality. And this year, we seem to be getting it right, 5% growth on balance sheet on Tanzania. And when you look at profit and loss for Rwanda, we see profit gone up by 4%, but we are aware the reason why it has not matched the balance sheet growth with profitability growth is because of the valuation. So on a constant, it could have grown 20%, but it maintains very healthy returns. The highest returns in the group -- the banking group is coming from Rwanda at 30% and the best return we have ever registered on average assets of 4.3%, the most efficient subsidiary we have, cost-income ratio of 38%, but we are optimistic they should be able to bring that to 35% by the end of the year. Tanzania. And we are very glad that of our banking subsidiary, Tanzania is managed by Isabella and Isabella is holding loans has grown by 51%. Why? Because the transformation of Tanzania was complete. We needed to clean. So the balance sheet has grown by 45%, and it's primarily growth of deposits, which we have seen has grown by 35% and quick conversion into loans that have grown at 51% observing quality loan book. Yes, Huntington Tanzania has a better loan book than Rwanda. So we start seeing this competition, which is very healthy, outstanding coverage. What do you have money, you never rely on security. He has a coverage of 200%. So yes, DRC has done very well at 100%, but you can see somebody who has done it at 200%. So there is no risk that is being carried into the future when you invest in such subsidiary, almost optimizing loan-to-deposit ratio. It is capped maximum at 85% at 76%, most efficient subsidiary, as we have said. And when you look at its P&L, which is -- sorry, we have gone Tanzania P&L. That transformation sees Tanzania profit before tax. go up by 11%. So we can see why did I go into the subsidiary stories? The transformation was not in one subsidiary. It's a holistic group-wide transformation, built on technology and build on governance structure. And we see return on average assets at 3.9 -- 3.5%, almost catching up with the best performing and return on average equity of 22%. So the group now is pulling together its equity. So that is how the subsidiaries have performed -- but when we look at them together as a banking group because those were individuals, we see the overall banking group, again, painting a very good picture. The motherboard, Kenya now in terms of deposit, having KES 741 billion and the regional subsidiaries having KES 751 billion. The has been won. The subsidiaries in the region are bigger than Kenya. And when it comes to loans, Kenya having KES 406 billion and the regional subsidiaries having KES 453 -- we are no longer a Kenyan bank. We are a regional bank. We have more business outside Kenya than we have in Kenya. And total assets Kenya at KES 978 million and subsidiaries at KES 970 million. And in terms of revenue neck to neck, and of course, profit before tax, Kenya because of the quick transformation leads at KES 35 billion subsidiaries, KES 29 billion. But the most important thing like maybe to look at is the return on average equity and return on average assets. And we can see now uniformity at the high earning so there is no subsidiary is pulling. And that transformation of a homogeneous entity means that we can now grow the bank quite -- so this -- and the trend. So this is a very nice competition that we have observed. So going deeper on numbers and we look at the total balance sheet, the balance sheet is up 7% to KES 1.8 trillion. And we see out of that KES 1.8 trillion is driven by deposits of nearly KES 1.4 trillion, of which KES 900 billion is in the loan book. But look at the confidence of the shareholders. The shareholders have moved their capital from KES 227 billion to KES 303 billion. So even when you look at return on capital, please don't underestimate how good the return on equity is if the capital has increased by almost 30% during the year. Customer deposit up 7%. Customer -- sorry, loans up 7%, 2% on deposit. We see distribution that in terms of loan book, Kenya is at 47%, DRC 35%. When you look at pipeline, DRC has a more healthy pipeline than Kenya in terms of economic transformation. Going to the next slide and looking at asset quality. And this is to us the center of it -- as we said, NPLs had peaked. They have remained stable. And when you look at from the last 5 quarters, this is the best quarter in our loan book. But it's not the best, but we began the first quarter at 14%. We came to 13% second quarter. We are now at 12%, and I believe we should be 10% and below by the end of the year. Coverage, we have the best coverage in the quarters at 7%. And now our focus is only on 3 subsidiaries, Kenya, Uganda and DRC. We can be able to focus on just a few subsidiaries because the others are in the shape. Asset quality distribution, again, we see that the loan is -- we don't have ad loans. It's fairly at Stage 1. And compared -- and we see the coverage of the 71% and another 38%, which is covered by guarantees. So we have 109% coverage for NPLs. And sometimes you may beat yourself too hard NPLs of 12. But when you look where my neighbors, although that is not part of your strategy, we should be at 5%, we feel comfortable because it reflects a macroeconomic headwinds. The industry is at 17 when we are at 1. When you look at comparatives, how are we doing with efficiencies in the intermediation, we are very happy that there is nowhere we look we have deviation. We are very aligned to -- it's a very healthy bank that reflects the industry broadly. So it's the large numbers. And that then gives us a thought of how the insurance group is moving out. We have left region. We are now on diversification of offering becoming a financial group rather than a bank, combining banking and insurance and checking the convergence. And this is where we have maybe a story of 3 years, a story that we are very proud of. When in 3 years, you are in the top 3 or 4 in an industry of 56 insurance companies, you feel all is well. And the positions are -- if we look at the numbers behind that positioning, we start seeing the premiums growing by 71%, insurance revenue by 57%, assets by 6%. So we could say the momentum is sustained. And also to remember, our prediction is that insurance will become a huge part of the group the momentum of insurance is much bigger than the momentum of the banking group, profit at 36%. So contracts still growing at 22%. And if we do a little bit deeper deep dive on individual subsidiaries, we see the first subsidiary equity Life Assurance still maintaining its head up 21% growth in profit despite a change in reserving policy to become more conservative because of that rapid growth. But the number may be to take from here is return on equity at 7.7%, it's the highest within the group. What does it mean? The insurance group is more in terms of payback, it has the highest return. It's a higher return than the banking. It's service, it's not balance sheet. It's revenue, it's nonfunded income and a return of 4.5%, the highest within the group. And when you look at life assurance, this is a subsidiary that has impressed us a lot. It has now processed nearly 18 million policies in just 3 years. And it's not from -- so an average of 3 policies because it's 7 million unique customers. So it's quite -- it has done what we expected it to do to disrupt and democratize insurance. I'm told that it might be 4x the number of insurance policies for the entire industry. So it's really brought in crucial in the insurance industry. Going to the next subsidiary, equity General, which General has been in operation since January 9 months results. As you can see, there are no comparables. We are impressed that in its first 9 months of being a startup, it has already made a decent profit of KES 140 million and compares favorably with the general insurance companies in the market and a return on equity of 19% and a return on asset of 8%, numbers that bankers can only really dream of, incredible. And the life insurance, which was only formed in September and is 1 month old. This is a 1-month-old baby, has made a profit of KES 23 million, the magic of Equity. You form a company, 1 month old and it has broken even. It's at a profit. And that's why we believe this group, like for the banking group, particularly in terms of reward to the shareholders. So when you then look at the end game of all these numbers is that the insurance group is something to watch. And that then takes us to the next group, the technology group. It's now taking shape. We can take pride and we can reveal what is in the works. Acceptance of digitization is right and that is the focus. It is helping to focus in what bankers may never be able to focus on, cloud transformation, business model transformation, AI and data security. We don't want to make the insurance staff and the banking staff busy with this concept. We want them to do what they know best. And so everything else will be provided as a service to them by the technology group so that you can have technologists providing the highest quality. We don't try to bankers to build it for ourselves. It's built and we become the main customer. But more importantly, have capability to also for the technology group to offer banking as a service, digital banking; offer insurance as a service, digital insurance; and this will be disruptive. This will be disruptive. The digital insurance might be bigger than the real insurance. The digital bank might be bigger than the bank. So that is how we are inventing the future. We can build the future on platforms, change our business model from brick-and-mortar, the place you go to, to what you do, visiting devices. And when you look at the customers, the customer seems to be ready. Their consumption patterns, they have all gone to the digital. And as you can see, we are back to the era of COVID when everybody was not going to the bank, that's where we are 88%. So after COVID, people started coming back to their branches, they have now gone out, and we believe permanently because now they are being driven by convenience, they have become used to technology, and we think that is why the digital bank, the digital insurance will be big. When you look at the customer behavior because you can only look at customer behavior from channels, you can see what is happening on self-service. They don't want any interaction with human being. They want to consume service on their own. So the focus of the group is to ensure the technology bank is an online offering with no physical premises. So you onboard yourself and you navigate and consume by yourself, AI becomes very important. And that's why new capabilities are being put at the technology so that we can become a global leader, a global leader in a region of nearly 450 million people. So we look at the -- and fastest-growing region in the world, a region where GDP per capita is one of the fastest growing. So let's look at -- concepts are good, but are they making business sense. So when we look at the nonbanking group, we see the numbers making sense. Assets now, they are edging towards 2%. When you look at revenue, 3% of the entire group. When you look at profit before tax, 3% of the entire group revenue and after tax, 3.1%. So they start becoming visible, and we invite you to track because that is likely to be the future, but can change very, very quickly with the technology group taking shape. The technology group, we are led by Rita. Rita is leading that trip, and hopefully we will see transformation we haven't seen before in the market. One of the most seasoned. Those who know her knows how driven she is and one of the most seasoned. She can tell her story. I don't need to tell her story. So look for her over a coffee and ask her what was James saying about you. But more importantly, it's good to make money. The most important thing is how do you spend your money. And I'm glad that we have retained our focus, our true north, that -- the essence of this group is to change lives, give dignity and expand the opportunity. And we have seen how much we have scaled. We're not just growing and making money. We have doubled up in terms of investment. Alex go back one slide. And we are saying -- the reason why we shall succeed in African Recovery and Resilience plan is because we are building the next generation of entrepreneurs, the next generation of leaders. 42% of our giving, and we see how big giving is to young people, Wings to Fly, Elimu Program. Equity Leadership Program follows with 30%. So what does it mean? It means 80% of our spending in the foundation is building the future, is investing in the most gifted, building the leaders, building the entrepreneurs, giving them global exposure as we shall see. That Equity Leaders Program, we now have 1,115 leaders in global universities with a significant 242 in Ivy League Schools. I took a lot of pride this year as we gave tickets to 16 in 1 year going to Ivy League Schools. So the leadership of the future, whether it's entrepreneurs, whether it's the staff of the -- whether it's community leaders, they can't escape that net. And that's why we hope they will remember how long our journey will be and that they will choose to have their accounts with Equity. The second -- as you can see, the second one is to support agriculture, Alex to -- is to support energy. Our sustainability team is health. Look at health. Health has overtaken agriculture, has overtaken energy and is rivaling enterprise development. Why? Because we believe in social investment, invest in education, invest in the health of the people, the rest will follow. And that is the story of the foundation. But in numbers, this percentage means a very different thing. Numbers of children 60,000, university 30,000, farmers 3.8 million, trees planted 40 million trees. So Equity does things in scale. When it comes to outpatient, 4 million patients. You can see how quickly this 4 million patients have walked into Equity Afia, 147 clinics. And cumulatively, we have spent KES 98 billion -- KES 100 billion. So it make money. That is more than 2x the profit we are talking about before tax this year. And more importantly, it is micro, and it's not by -- and this may be is the link. We saw we dominate, 45% of our SME loans are given by Equity. The reason we're able to do that is because we derisk them and we empower them. Look at it, we have trained nearly 700,000 of them, and that's why we are able to give them KES 400 billion. And look at the focus on women, 2.5 million in a dedicated way, make correct history in one way or another, and that then gives us -- and I think it's good to see where our children are going. Look at the global representation. Europe 100, Asia now 100, and we are setting them to learn the best, not to copy any country. East-West, it's where we could train our children. And even Africa, the best university, Cape Town, [ Shashe ], the university in Rwanda. So it's distribute them globally, global exposure, global network, global experience and then map this capability across the African continent. This is providing the future through the African Recovery and Resilience Plan. And of course, sustainable development then becomes a key focus. And I'm glad that it was only last week that we launched our sustainability report, and we also looked at impacted disclosures. Again, we hold ourselves to great accountability. And maybe before you leave, make sure you pick our disclosure on sustainability report. Dr. Joanne make sure it's in the pack with Julius. And so we are focusing. We want to be a global leader here, and we want to bring blended finance so that we can really strengthen our position. If you get booklet, look at that QR code, you see what it means. So sustainability, risk management and advocacy, leadership, [ grow above ] the leadership so that the world could be -- we've got great partners, and we're very optimistic we should be able. I know you have been waiting for the numbers. I don't want to keep you any longer. Here are your numbers. The balance sheet, as we said, has grown by 7% to KES 1.8 trillion from KES 1.7 trillion. I have added KES 100 billion. And of that, it's being driven significantly this time by shareholders' funds that has increased from KES 227 billion or KES 230 billion to KES 303 billion. An additional KES 70 billion of shareholders' funds have been unlocked. And this is in preparation for being able to migrate cash and cash equivalent. If you look at cash and cash equivalent and government securities, that gives you KSE 850 billion. We would like that KSE 850 billion, half of it to go to the loan book. If you can see, it's lazy a balance sheet. Loans are KSE 850 billion. Cash is KSE 850 billion. We need more dreams to be fathered. Dreams made come true. And that again shows. Some people say cash is king. So we have cash when the opportunity is coming. And you can rest assured we will use this. And that's why we said luck is when opportunity comes when you are prepared. We have not only prepared by transforming ourselves, becoming technology-driven, but we have cash on the table, KSE 850 billion, a huge opportunity to migrate. And when you migrate that because you'll be migrating from cash, which is not capital weighted because I want to manage expectations for dividend. Managing that is very delicate. We have to balance, how much cash do we want to move from loans. We'll be moving from 0 capital weighted assets to 100% weighted class. So there will be significant capital consumption from strategy perspective. But how does this balance sheet produce? How does it perform? And we look at interest income, as we said, as rates came down, we passed that to the customers. We reduced by 300 basis points. So income has only grown by 3%, but interest expense have gone down by 21%, giving us a 16% growth in net interest margin from KSE 80 billion to KSE 93 billion and non-funded income 3% from KSE 61 billion to KSE 63 billion. And total income growing by 10% from KSE 142 billion to KSE 156 billion. But how did we spread that revenue? We ensured the efficiency, particularly in quality of loan released more, so less provision. Provisions are down 9% from 12.7 to 11.6. Our staff cost because we need to position our staff. We need to hire the right people, up 19%. Other operating expenses as the efficiency of the systems come in, down 6%. So total cost growth is 0, but total revenue is 10%. And with a cost/income ratio of 50%, so it means like revenue relative to cost have gone up by 20%, giving us a profit before tax of 29% and very efficient tax management, going up by 14%, and that gives us profit after tax growth of 32% of up to KES 54 billion from KES 41 billion. So the shareholders wealth growing by 33% from KES 39 billion to KES 52 billion and earnings per share going up by 33% from KES 10.4 to KES 13.8, 10% to 14%. So broadly that not includes the effect of South Sudan, which is now muted. We have been talking about Sudan. So that doesn't this year have significant impact. We have known how to manage and stabilize South Sudan. And that then gives us one may be of the best slides. I feel very proud to present at the group level, everything is green. When everything is all green is go, go, go. So look at the growth we'll be able to build because all the parameters are pointing the right direction. It may not be the -- balance sheet may not have come through the way you would have expected. P&L has come through simply because of efficiencies. And this, you could really look. It's good to look at ratios. That's what -- really look at the ratios. The efficiencies, as we said and the ratios, these are very significant. Our NPLs have moved from 14% to 12%. Our coverage from 68% to 71% and everything looks -- the direction is the right direction. So -- and that is what -- so we have nothing really to worry about everyday, how do we grow because the engine is efficient. There is nothing troubling as you can see in every respect, directions gone. When you look at profit before tax and return trend because this is very important. Efficiencies, what do they mean? Look at profit before tax. If this is not galloping from 9% to 18%, 18% to 23%, 24%, that trend, that's a promise of what it will be maintained. because it's efficiency. This is efficiency. We will now sustain that trend with unlocking the balance sheet. We have dealt with efficiency. We need now to deal with the balance sheet, return on average, right direction, return shareholders' fund such that you have no limitations. The capability is enabled, is locked in. And lastly is regulator financial ratios, and we are comfortable when you look at -- Alex, what has you jumped. Again, a picture you're looking at level. And as we said, it's efficiencies. Now it will be balance sheet -- unlocking balance sheet. And that's what we hope to do next year. The financial ratios, as we have seen, capital is in the right place. All ratios have the right trend at the group level. If you look at liquidity, we are at 61%. Capital to risk weighted, we are at 18%. Core capital, we are almost at 17%. So the ratios are good. Deposit to -- loan-to-deposit ratio, we are at 64%. We can go all the way to 85%, unlocking or transferring 20% of the balance sheet from cash to loans and that would be a different game ball, and we will be playing at a different league. Return on equity at the group -- return on assets at 4.1%, return on equity at 26%. I think this is what I feel we have managed to get the ship steady on cost, and we are following the cost. We are now able to predict the group. If you look at the forecast we gave you at January and where we are in September, save for 2 items, growth of loan book and NPLs, which NPL, we are saying will be below 10%. We are where we had promised. We have gone back to predictable equity. Why? Because during transformation, there is a lot of turbulence, but this shows now we have reached the calmness. We can now predict, we can tell and we can with precision tell the investors, this is where we should be, and this is what we expect as investors. The market has been kind to us, and we have seen our market capitalization. And this is not about balance sheet size. This is about the brand value. And as you all know, we are the most valuable brand in the region. We protect the Equity brand jealously because as you can see, it's very valuable. It's not -- it's what bring -- people buy brand before they buy product. We're in a trust -- in an industry where trust is a currency. I want to thank you most sincerely for coming, for the time you have given me, but I've told you what I wanted you to hear. You can ask me what you want, you would have preferred me to tell you. The team with me will answer the question.

Welcome to the interaction session where we could seek to unpack the results. We can seek to clarify, and we could really hold and I would have the honor of really directing the questions. So we can take the first question.

Thank you for being as upbeat as ever. You talked of blended financing passing capacity building, derisking other collaterals. To a youth who is with me, just explain what exactly -- how exactly that is beneficial to us as a youth? Probably to Moses or even yourself, when the Ukraine crisis emerged, there was talk of how to make us self-sufficient in wheat. Where are we in that? And are there other areas where we can grow wheat than the Timau areas? To the Uganda MD, I know what equity bank means to a Kenyan. And Dr. Mwangi has talked to brand before product. What does Equity Bank Uganda mean to an Ugandan?

Thank you very much, George. So Dr. Joanne, the first question is yours. You can take the podium. Joanne manages the foundation, let her talk about blended finance, who are partners in blended finance are and how she is -- what blended finance mean and what is the mix of blended finance and how does she use blended finance?

Okay. Thank you very much, George, for that question, and good morning, investors, directors, colleagues who are present. George's question is on blended finance and our application of it within Equity Group Foundation. And specifically, you asked George around what it means to a young person. Yes. So within Equity Group Foundation is that we categorize our partners in terms of the support that they come on board on our various initiatives. And specifically on the financing component of it, I think what Equity has been very good at doing, as you've seen indicated is on SME lending. But for perhaps young people who are just getting into financial services, what we do as the foundation is try to understand what sectors they are interested in so that we can apply our interventions in a way that will be very responsive to the sectors that they are targeting. For example, when you look at Young Africa Works, it was around MSMEs across various sectors, trade and agriculture is what we noted the most. So we're able to receive funds from our partner, Mastercard Foundation, who gave us grants to ensure that we can train these cohorts of the populations to understand entrepreneurship, education, financial literacy and then also digital literacy as it was applicable to doing government -- I mean, accessing e-government services. To scale that, of course, beyond the training, they're able to receive now financing from the bank, and you've seen the scope of that financing. So there was the grant financing that came in, then there was the financing from the bank that was able to come in and scale that. And now they've been able to grow. We've seen growth in loan size over time. I think in summarizing, the last example of it, a very good one as well has been Equity Afia, which you've noted its success over time. Equity Afia actually started as a joint development initiative between USAID at the time and Equity Bank, who came together to do a proof-of-concept model of clinics. Subsequently, you've seen that with capacity building for our young doctors from our Equity Leadership Program, they've been able to scale the initiative through financing received in terms of credit from Equity Bank. So those are some of the stories -- success stories that come as a result of blending. Additionally, I think further towards the Equity Afia story. In terms of strengthening its operations, we've seen other partners coming on board to see how can we strengthen the health entrepreneurship offering and Proparco has come in to give us funds to, number one, understand the DRC market as we're going in, so do a market feasibility study for entry into DRC; strengthen quality, which then allowed us to onboard SafeCare as a quality accreditation mechanism and other additional inputs that have come in are through the support of Proparco. So various partners are able to come in with their strengths and their tools to ensure that we're able to deliver a sustainable operation. Thank you very much.

So George, you blend the grants with debt. So Equity Group Bank brings debt and [ Donna ] brings a grant, use the grant to capacitate and to derisk. You capacitate by training, that has a twin effect. It increase knowledge, hence, reduce the risk of borrowing. Some of the partners like Mastercard has also said, here is $200 million. We want to guarantee women, give women loans. Somebody like IFC has come and said, here is KES 2 billion or $20 million, we guarantee you to give loans to refugees. So we are not looking for security. We are not looking for credit history. Somebody else might come, anonymous Donna said, I've never seen anything like this with Equity Afia. Can I sponsor you and you do 30 Equity Afias in remote regions, so you can have inclusive health. And we were given a grant of KES 1.7 billion, and we build that 30 clinics, Equity Afia Clinics in the remotest parts of the country, including Moyale, Madela, I'm asking you, Lamu, Baringo, Tanaliva. So the remote areas that an entrepreneurship model would never have worked. So that's what you do. And that is what we are talking about, the private sector-led development. As you can see, that is development, but it's a private sector, somebody with a grant, somebody with a debt, somebody with another tool. The most powerful tool we have had is Africa Development Bank guarantee, credit guarantee. And we have taken KES 0.5 billion of a guarantee so that we can lend to women without securities, those who don't have security. So again, guarantees and debt coming together and grant. So you see it's a blend of guarantees, a blend of debt, aggressive guarantees. So that's broadly -- and a concept that Equity has geniously been able to create and that then become the model of development financing because development is not necessarily profit making. You use your money in a very sustainable way and do what governments would be doing as a private sector or fill the gaps that are left out because you want to address quality of life of all and you don't want to leave anybody behind. And you believe every dream is valid.

Good morning, investors, and thanks very much, George. You have actually asked a question that touches to the heart of our strategy. Africa Recovery and Resilience Plan was built out of Africa not being able to feed itself. And when you look at statistics around what does arable land mean for Africa and why we are not able to produce, it touches to the question that you've mentioned. So what we are doing as a bank is to ensure that first, there is the right capacity and the knowledge. So as a bank, we've invested significantly around technical knowledge to support our farmers as the first thing. So I have people who have crop husbandry skills internally to ensure that we can be able to engage and support farmers even as we go through the financing model. Whatever Dr. Joanne has mentioned forms part of it. Specifically, you've asked around wheat. So we've -- we are quite big in Narok. We are big in Timau area. And we are looking at how do we get back to glory days that Kenya had in terms of wheat production. And the bank has been quite open in supporting farmers in these 2 big wheat growing regions to ensure that we are able then to capacitate them, develop their farms. But most significantly, it's not just their own production that we are looking at as a market. We are also looking at how do we widen the East Africa market. If you look at our neighbors, and I'll pick 2 of them, part of our strategy is opening trade routes. Ethiopia has been able to turn around their wheat production capacity. They now have excess. How do we get part of that in as part of our trade strategy into Kenya? How do we turn around the potential that Tanzania has in terms of turning around in capacities that we may have across the region to do that? And then is to look at the whole value chain. How do we support the whole wheat value chain in terms of milling, distribution and getting this into the market and at the right price to ensure then that the whole value chain benefits? Because when you look at Africa Recovery and Resilience Plan, it's not bucketed just to the primary agriculture, but our whole essence is to ensure that the whole value chain works and there's also trade that's attached to it. Thanks, George.

Uganda?

Thank you Dr. Mwangi and thank you George for asking a very pertinent question, very relevant. What does Equity Bank mean to the Ugandan economy and to the Ugandan society? We are a significant player in the Ugandan society and in the Ugandan economy, being a domestically systemic important bank #4, meaning we play a critical role in the economy of Uganda. How do we deliver that? We have maybe one of the biggest networks, the rails to the end of the market. We have 50 branches spread across all regions of the country. We also have the agents, maybe with the widest spread of agents, about 10,000 of them. And we also have merchants across the country, over 20,000 of them. So this makes us be able to reach all communities. And it's in line with our strategy, with our purpose of transforming lives up to the last mile, up to the household level. We have the biggest impact in Uganda in the SME sector, the micro, small and medium enterprises. We are maybe the biggest bank lending, close to 45% of our lending is going to the MSME segment, which if you look at the Ugandan economy, more than 70% of the Ugandan economy is in SME. So it means we are maybe the major bank playing a relevant role in the interventions to grow the SME. So we are quite big there. We don't only do that. We also support the government. The government came up with the ATMs, what they call the ATM strategy to support specific sectors such as agriculture, where we are quite big in agriculture. We participate in the entire value chain in Uganda in agriculture. We have partnerships with all the corporates that are either at the downstream or upstream of agriculture, meaning the entire value chain. We have partnerships there, and we support the government. We actually recently singled out as one of the significant banks that are supporting -- that is supporting agriculture in the market. And also the social investment arm, which Dr. Joanne spoke about. We are the only bank that has got presence in all refugee camps in Uganda. You would know that Uganda is one of the largest refugees, not in Africa only but globally. And we have partnerships with WFP and other partners like Mastercard Foundation, where we are offering services to refugees, where we are also offering not only literacy training to the refugees, but creating an enterprise culture in them. I'm glad that since Equity went to Uganda in 2008, we have managed to create over 20,000 entrepreneurs out of refugee camps. So by that, we play quite a significant role, and we are a very significant player in the Ugandan economy and in society, transforming lives at the base of the pyramid. Thank you.

I have 2 questions. But before I ask those 2 questions, allow me to loud you for...

First of all ask the question and then we'll give you another opportunity.

Okay. But allow me to loud you for not only being the powerhouse that you are, but a blueprint of the organization brand and a trailblazer. My first question is access to credit and capital for SMEs. As one of the giant solid and strongest brand in banking industry, what role does Equity play in offering support to Kenyan start-ups in regards to credit and funding, especially for women and youth? My second question is on ESG, sustainable lending and investment practices. Do you have policies to restrict lending to high emission industries, for example, gold, oil and gas? And if so, how do you access the environmental impacts of companies you finance? My name is Sally...

[ Julius, ] do you want to take the question of ESG, get to the mic Julius or to the podium. And yes, on SME, let me try answer it because the -- broadly, we are an SME bank. And the way you unlock lending to SMEs. In actual fact, we start with micro, small and medium enterprises is to ensure you try to formalize them. Formalizing them is a journey. So before you formalize them so that they grow into the informal sector, you prepare them well still in the informal sector. And the best way of supporting them so that they can become creditworthy is to train them, and we call them capacitation. By capacitating them, then you derisk them. They become now eligible for lending. You also help them to create then a credit nature. So the first step is to organize them to use social capital because they have no securities. They use social capital. And that's why we are very large in women group already. You really organize them into groups, that social capital of network, you use it, the pressure of peer pressure, you use it. You use networks like the religious organizations, you get the bishops to guarantee the guild women. You really try to bring them closer. And that then eventually, they're able to break through. As they break through and become individuals, you then come with the blended finance. You come with the guarantees and you continue to mentor them and now elevate training to entrepreneurship training. So you walk with them in the journey. And I'm really glad that of our top 146 largest customers in Kenya, 60 started at micro level. I know of one who was an open air photographer. The first loan we gave was to move from Uhuru Park to [ Tusker House ], those who know where Tusker House is at the bust stage with 5,000 loans. When I look now, their loans are in excess of KES 6 billion. Human beings has incredible capability. All that you need to do is to give them opportunity, is to handhold them. They have a reservoir of energy and they have big dreams. Intelligence is evenly distributed, including to women and the poor, but opportunity is what they like. What the training does is to empower them to have courage or faith and belief in self is what you could call self-esteem. We all know that our fortunes shrink or rise by the -- proportionately to our courage. So we encourage them to be bold and to be courageous. And that is why -- the reason why Equity has been able to grow from #66, out of 66 ranking in the bank to #1 is because it invested in the customers. The reason why Equity has been able to transform is because that investment converted in trust. So even when we were transforming systems, and there was a lot of instability, the customers stood with us. They knew there would be a better day because they had seen better days. So it's walking the journey of people's lives, changing their lives, expanding opportunities. The biggest opportunity we have to transform Africa is to invest in the African people. And the people who are in the business of making money or making goods and services, which economists call GDP when it's aggregated are the entrepreneurs. So that's why we back the entrepreneurs. They are the face of African entrepreneurship, and they are the face of African capital. On their own, they will remain marginalized because they have no credit history. They have no references. But if you had to hold them and make it possible, believe in them, invest in them, you walk the journey together, and we are very proud. We grow because that open air photographer grew. In her branch, then she was negligible. In her branch now, she might be 20% of the entire balance sheet of the branch. That's how Equity grows. We aggregate the assets of our customers. So it's important for us to build the assets, but you don't build through loans. Loan is just one component. It's building confidence, building faith. The latest we are doing is to forming entrepreneurship clubs, so that we now form clubs where we support each other, we mentor each other, we train together, and I want to really give back by giving my entrepreneurial skills to thousands of entrepreneurs who could take the continent to the next level. The advantage of Equity is that it does all those things in the foundation. The insurance comes and ensure the gains, ensure life, health and asset while the bank funds through loans. And that is why it's a winning formula because we are a one-stop shop for everything that one would need in their journey of expanding their business opportunity.

Thank you, James Mwangi. Julius here. So on ESG, and thank you for that question, is that we continue to embed sustainability in all that we do in our business, whether it's through our processes, through the people and even our partnerships. And at the governance level, we actually have at the Board level committee that actually look after sustainability. And that is happening. At the management level, we have an oversight management committee. But then in terms of lending because that's where we interface on how we support and we lend activities across our ecosystem is that any lending activity or facility is assessed through what we call the environmental and social due diligence guidelines. And once that is assessed, of course, there are different categories of risk, but we ensure through that -- through the risk management, we are able to turn those inherent risks into residual risks or actually totally minimize them in a way that they don't compromise both our ecosystem, our nature and our environment. So that is very well mainstreamed, and we have what we call risk ownership. So what we have at the policy level is that we have the ESG policy and framework that provide that guidance. And we ensure that then we have 3 level of defense where that risk is owned at the far sight, now that risk is also oversighted, but also that risk is assured to ensure that the residual risk is not really adverse or irreversible to what we may have as an impact. So ESG is purely anchored and mainstreamed because we have to do business today, but also ensure that we do business tomorrow and enhancing our resilience. That's the way I would respond to that question. Thank you so much.

Let me add a little bit. You have 2 options when you are dealing with ESG to encourage and to inspire or to punish, the carrot and the stick. And what we opted to give the carrot, encourage people. So we have become a global thought leader in nature, environment space. The second aspect when it comes down home, we thought we would encourage. And I'm sure you know of our program to convert all schools, boarding schools in the country that are using wood fuel to transition to cleaner, sustainable energy -- renewable energy. And I'm glad we have made a significant effort. This year, we have a target of 1,000 schools and that is you encourage, but you encourage them through economics. What we have proved to the schools is that it's cheaper by 40% to use renewable energy than to use fuel. So we give them the loan and it is paid by the savings because we have proven the concept. So the second one we have done is look at the households , and the biggest threat to our forests is households because they use wood fuel, energy for cookings and for lighting. And I'm glad we have been able to convert 608,000 households from using firewood to using renewable energy. So we have taken a positive way of migrating people and saving people. The second one is to be a role model and to be -- to demonstrate in society. And that explains why we took it to ourselves to plant trees. And up to date in 5 years, we have been able to plant 40 million trees or geo-mapped so that we can tell our forest, we can tell our tree fruits, and we have a survival rate of our trees of 95%. So everything is measured. Now when it comes to the punitive, what we have done is we have excluded -- we can't find the coal and such extreme energy sources. And -- but remember, it's a delicate balance because on one hand, you are fighting poverty. You can't fight poverty without energy. And so there is a delicate balance, but we are delicately balancing. The best thing is not to buy people, is to educate people. And that's why we thought of thought leadership. At the global level, I co-chair the United Nations Compact private sector alliance on climate, I'm a co-chair of his Majesty King Charles' Sustainable Market Initiative for Africa, which focuses on nature, environment and climate change. And through those programs, we're able to connect with the world. We're working with IFAD to try and see whether we could get a partnership with the Global Climate Fund. And locally, we are partners with the Global Adaptation Fund. And hopefully, by the end of the year, we will have been registered as a part-time -- a member of the Global Climate Fund so that we are very well positioned to provide leadership. We're working with Proparco to develop products that would respond to sustainable climate smart agriculture and particularly for adaptation and mitigation for small-scale farmers. Last year, we were voted by IFC as a bank with the highest number of loans given under mitigation and adaptation program. So it's an area of global leadership, not an African leadership, but global leadership. I have a question for Willy. So Willy, this is your question. How can we assist DRC through transport investors in public transport to change the state of transport logistics in DRC? That question has been asked by Stephen Kimani. And Francis Elanga says how can we scale credit and loan granting in DRC to reach all core bodies because they have dreams? And I acknowledge from my internal knowledge that you have 135,000 loans, but DRC has 110 million people. That has been asked by Francis Elanga.

Thank you, Dr. Mwangi. Good morning, investors. Good morning, colleagues. It's a good opportunity here to represent our investment in the DRC, but as well as getting to share a bit on the opportunities that we have. So the potential, I think Dr. Mwangi has mentioned on the climate, how the DRC can play a big role with regards to -- how the DRC can be a response to the climate challenge across -- the global warming challenge across the globe. Before I go into these 2 specific questions, I think -- so one element I want to maybe share with the audience is our strategic position in the DRC, as we know. So we've been there since 1909 -- 1908, 1909. And throughout the last century, I think we have become a very powerful engine throughout not only the banking group, but as well as getting to see how we can tap into other areas such as insurance, DFS and so on. As you know, DRC remains quite unserved in terms of financial inclusion. This is where we believe as a powerful engine. So we really need to see how we can partner with not only the governments, but as well as the local environment, whether it's the corporate but also the localities and communities on how we can deliver on our commitment to transforming lives for the people. So having said so, I believe the first element that we have done is to reinforce our corporate governance because we are committed to keeping shareholder investment in the good shape. So making sure we continue to engage with local government, engage with regulators to making sure we continue to be on the top of our commitment vis-a-vis the local [indiscernible]. I think this is what we have done quite well over the last year. And the second element is on how as a financial institution, so we're dealing with risk management. As you know, DRC remains quite a place where I think we need to do better and giving you the right picture with regards to how we're managing all the risks related to not only ourselves as a financial institution, but as well as the environmental risk for which we need to save our shareholders' capital and so on. And for it -- think to accomplish that, I think we need to look into strategic partnership. As I said, government remains one of our key partner in anchoring our strategy so we can deliver for the market via all the segments, but specifically on SMEs and then the retail and mass. The third element is on human capital. DRC has also been underserved in terms of competencies and skills. There as well, we've made quite significant improvement and making sure we train the people and making sure we bring in the leadership, we'll be able to really sustain that investment in the DRC. And the last partnership angle is bilateral and multilaterals across not only the local environments, but as well as strategic partners across the globe. Now on the 2 questions, first one on how do we support in terms of logistical challenges, so transport challenges, as I said here, we continue to talk with the DRC government. They have quite a lot of initiatives on how they can interconnect the 26 provinces. The first initiative is on Lobito corridor, which will play quite a significant role in not only connecting the DRC to the Atlantic Ocean, but as well as providing opportunities within the South region to look into how the small localities can also play a role in interconnection with the key anchors, which are mainly the miners. There is also another initiative within the DRC -- within central of the DRC, so which will connect what we call the region of Kasaï in the central, all the way up to Eastern DRC, connecting from Mbuji-Mayi to Bukavu all the way up to Beni with exit to Ugandan border via the Kasindi. The other initiative is on Southeast, so whereby through the Lobito -- not to Lobito, the DP World, deep port sea in Bacongo, where as well given the high concentration of population in Kinshasa, in Bandundu and then Bas-Congo. The government of the DRC has also taken a very strong stance on how we can connect Kinshasa via Matadi and down to the ports. So this is where I think we'll come in as the strategic partner to really supply the government via our robust banking platform and supporting not only the government directly, but as well as not only the big names in terms of corporates, but as well as all the SMEs that can be part of that ecosystem. The last question on SME. I think this will continue to be an area of focus. I know DRC remains quite highly concentrated in terms of the loan book. But there as well, I can commit that we are making an effort to reduce the overdependency of our loan book in the big corporates. So we see how as an SME bank, we can also tap into sustaining the development and the financing of those SMEs. But as I said, risk management, I think, is the first element. So we need to capacitate all those SMEs in making sure they can become viable to us with regards to our commitment vis-a-vis not only the DRC [indiscernible].

Thank you very much, Mwale. I think SME is becoming really the issue everybody is asking about. He is our Group Director for SME colleagues in the room and the Director of Women Banking. [indiscernible] 2 of you, so you answer that question better. Meanwhile, Brent, how is our strategy for DRC? And why are we so confident about DRC?

So let me answer that with some of the points that James made in his presentation earlier. And he essentially contrasted 2 periods, one over the last 4 years in terms of internal transformation and the transformation to essentially enable us to have external impact of ourselves. So this impact that we're looking to have is documented in our strategic plan, the Africa Recovery and Resilience plan. But in order for us to have this transformation, the social and economic transformation, there is some capacity that we require internally. So for the last 4 years, as James mentioned, there's been a lot of change that has taken place in the group. And this was amidst a challenging environment. And it's important to highlight that because in spite of the challenging environment, one key takeaway that stakeholders can have is the business model, this vision that we have was tested. And over this same period, we continue to have impact. Now you contrast that to the outlook that James mentioned, and it's one of growth and importantly, to the 2 questions on DRC, it's an outcome of transformation. So as we apply the Africa Recovery and Resilience plan using our 3-engine model, and let me explain the 3-engine model. What Dr. Joanne explained with the foundation and the social engine, this is essentially a capability that allows us to capacitate, derisk and transition marginalized stakeholders into value chains, of which value chains will be connected continuously into a corridor. The economic engine is intended to scale up and finance what the social engine has essentially catalyzed. And this is our banking, our insurance and our technology businesses. And then the questions around sustainability and ESG. What we want to do as we develop various value chains that will connect into corridors, we want to ensure that there's resilience in these value chains. So to the 2 questions, logistics and transportation, the DRC. We appreciate that the DRC is yet to connect itself in terms of infrastructure, and there is progress in doing so. But in the meantime, in appreciation of this challenge, we have set up the management teams in a manner that allows us to localize impact, but leverage off the capability of equity BCDC as a subsidiary, but more importantly, leverage off the group as well. You will appreciate that out of the 9 countries that neighbor the DRC, we're in at least 4 of them. So in this regional presence that we have and this expanded management capacity in the DRC, we are able to connect our clients knowing our capabilities that are specialized within the West region, the South, the East, center, and we'll expand our capacity in the north as well in the DRC. So in building these logistic corridors, these trade corridors within the DRC and across the region, SMEs become a critical part in this transformation. You -- if you have looked at our Africa Recovery and Resilience Plan, and James mentioned one of the key targets we have is 65% of our loan book in SMEs by 2030. Our intention is to build value chains which logistics is a key part to connect in addition to finance. There was a question earlier around wheat and how -- and if I can combine it with the question around SMEs, what we are doing with value chain development and this private sector-led development, we are looking at transformation of Africa in a very holistic manner, where we want to essentially close the gap of 3% of the world's GDP and the 25% of the world's population by 2050 in developing value chains. So with the wheat farmer, we want to improve productivity and output. And James mentioned that there is the intention to increase our manufacturing, i.e., value addition to 15% of the loan book. So we want to take that higher productivity and output with what we're doing with the foundation, i.e., the social engine with the capacity building, bringing in the agronomical capacity, connect it to manufacturers for which most part in Africa in addition to the fragmented value chains, utilization of factory capacity is very low. So we want to expand capacity, improve productivity with the farmers and connect them to markets. This is what we intend to do in the DRC, where there is a big opportunity, and there was a question, how do you get involved in the opportunities in logistics? We have a global affairs team that does trade missions every other month, whether physical as well as online. So our invitation to those investors, those businesses interested in logistics, in agriculture, in tapping into the consumer potential in Kinshasa, there's around 22 million, 24 million consumers. We invite you to join us on our trade missions. So maybe those are just some of the responses to all the questions because all these questions that you're asking really piece together into what we intend to have as in social and economic transformation of Africa through a private sector-led collaboration with all the other stakeholders.

As you can see, DRC. At the moment, DRC, we are focused on artisanal miners. How do you convert those who are doing artisanal mining into lead, formalize and they become very active. And the best thing is to equip them with the right tools and to organize them into cooperatives so that they are not taken advantage of. The DRC government has been very organized in that. It has formed the cooperatives. It has organized the takeoff of the output or the produce from artisanal miners. So market is not a problem. There are no [indiscernible]. The second one is agriculture. I'm really excited about the East region. The East region is overperforming, particularly on cocoa, tea and coffee, and we have been able to organize some of them direct shipment, and you can see the revenues are big. It's an area that is also very big in tourism around the lake and the Gorillas from the DRC side. And that, again, is an area of huge opportunity for funding. So agriculture, and artisanal mining and of course, trade. When you look at SMEs, Kinshasa is between a number of 20 million to 25 million people. Would you imagine the opportunity for SMEs to feed, to growth and to provide logistics for such a concentrated population. So that is what we think we can unlock and give every Congolese opportunity. I gave you the podium. You didn't seem to take it. What is the strategy of SME, but not in more than 1 minute.

So what we've done for SMEs, we split them into 8 focus sectors, and this is based on our ARRP. This includes education, trade and distribution, health, manufacturing, and we've also gone down to women and youth and split them to that. And the 4 areas we focus on this is we are solving for the trade finance solutions, which is mostly addressing their short-term working capital needs. We're also solving for the international trade solutions that we're able to cover that. And all this is tied on a cash flow-based lending where we tie the lending to the cash flow of the customers. And this comes through the ecosystem -- solving on the ec -- for the ecosystem. If I give an example and allow me plug a customer name here, EABL. Out of the 108 EABL distributors, we now bank 65. And out of those 65 distributors, we now bank about 18,000 retailers under that. So we...

That is ecosystem banking, not a customer, an entire ecosystem. And that is why we are rapidly growing. The approach has changed. [ Collins ] is very grounded. You want to introduce yourself a little bit. [indiscernible] so that people know it's not just every concept.

So I've been banking for 25 years. I started off at Cooperative Bank where I did quite some bit of micro credit lending for about 6 years. Then I joined Stanbic Bank as a corporate relationship manager. I then moved to head governments and international organizations at Ecobank. Then I headed public sector and nonbank financial institutions, again at Ecobank. Then for 2 times, 2013 to 2015 and again, 2022 to 2025, I headed SME banking for Kenya and also had 2 international teams heading SME for Kenya, a lot of for Tanzania and also heading SME for Uganda.

How many staff report to you?

The total headcount for SME is 378.

Now that shows you the seriousness with which we have taken SMEs in the bank. The bulk of our staff are in that segment. And [indiscernible] focus on women. What is the strategy of ensuring every woman is banked?

Thank you so much, the CEO, and thanks for being our champion in terms of women banking. So as you see, my name is Dr. Silpa Owich, I'm in charge of women Banking. What we are doing is revamping the already existing Fanikisha banking and now as GCEO talked about it, we are not just offering the financial solution, but you're looking at the women as an entire women. So we are looking at the insurance bit. We've just launched the health insurance for the women because you know a healthy woman will definitely make healthy financial solutions. So as part of the women banking, we do the financial solution in terms of capacity building as well, where as GCEO has talked about, we are derisking the women so that they can get into the financial arm of the bank. And that we start from the group lending as GCEO talked about. We start from the group lending where they come together with the social lending, after which then they get into the individual lending that is where now we come in and support them in terms of capacity building, support them in terms of training. You've just seen the number of women who have been trained and youth, it's close to 2.5 million, and that is the effort that we are making. Currently, with partnership with IFC, we are training close to 400 women currently. I think they're already in class. They're being trained by Leeds University, just to support them also to ensure that they are financially upbeat so that they can also participate in the current financial solution. SME is one of our key sectors. And as you are speaking, of the SME loans that were disbursed, you saw it in the system. Currently, the current disbursement for women is 27%. Our focus is to make sure we push it to 40%. And this, we are doing it with the support of our engine, drivers and with the support of our insurance section and of course, the digitalization because most of the women don't have that chance to walk into the banking all sometimes. They are very busy, and you can see how the numbers are coming up. So with the entire for -- the 2 engine -- twin engines that we're having, we are supporting the women and you are certain that you're going to make the balance sheet...

So women is a real focus. And as you have heard, it's not just us training that is a partnership with IFC. You get a University to train. So we are working with the Vice Chancellor of Kenya Open University, can we make these programs available online for women. We have already signed an agreement with WorldQuant University for the online programs to ensure we train. We have signed a partnership with the CODE to provide training to 600,000 people on technology courses, and we have signed with Huawei, 10,000. So it's -- the focus is now to move Kenyans broadly from thinking about micro and small to occupying the space of coding, AI, data and that's the whole -- and maybe I will ask Johnny, if you are in the room, take the mic and explain the 4 programs and how they are being organized and how -- and as Johnny speaks, the Lydia prepare, how will we use our technology platform to scale this and how will the technology group look like in 5 years. Johnny maybe you can introduce yourself instead of me introducing you. But he's a Technical Specialist in innovations. He holds is under graduate from Stanford University and his masters from Harvard University, and we have detailed him to ensure our training programs at group level tailored to innovation to ensure our Gen Zs are adequately trained to become an innovative generation working and serving the world from home. What you can say about your experience?

Thank you, GCEO. Yes, we have really adopted a growth mindset for everyone, all of our stakeholders within our ecosystem, our banking ecosystem. So going first with what we know, our staff, our ELPs, our wings to fly scholars, we've signed multiple partnerships where we're really working on the digital skills of the future through our capacitation programs to be able to effectively deliver on the promise of growth in a digital age that is where everyone, all of us together are AI ready. So with Huawei, first, we've developed a program for 10,000 people to be upskilled really in the next year on AI, cloud infrastructure and cybersecurity, which is going to enhance our ability to actually draw on innovations across our entire banking ecosystem. With iamtheCODE, we are focusing on really world-class content for free that has really never been available at a large scale, at a national scale, at a regional scale across all of our subsidiaries to be able to effectively deliver on educational-related materials to all of our core stakeholders. This is a very exciting initiative that we're launching. It's a long-term partnership that we have, and we invite other partners to the table now so that we can effectively distribute at the community level opportunities for all young people and people in our ecosystem to learn and be upskilled. With WorldQuant University, we've really focused on upskilling the brightest and the best amongst us with free opportunities to actually earn full Master's degree programs in financial engineering. There's an additional program that's going to be launching this year on applied AI, and that will be eligible to all of our core stakeholders as well. We have an uncapped number of Master's degrees that we can actually enroll our ecosystem partners into. And so it's a very exciting initiative where if you were to go pursue these kinds of opportunities at other educational institutions, they might cost up to $150,000 each. Again, we're able to offer those for free through our WorldQuant partnership. So we're excited to be launching a host of real material upskilling opportunities that are going to help future-proof our business and future-proof our entire banking ecosystem. Thank you.

So this course is up to 600,000 for our customers. So if you want a master's degree in AI, please, it will be for free. We want to show gratitude to our customers. If we don't want to do, kindly encourage your son and daughter, we'll enroll them. It's for free up to master's level. We have 65,000 different courses that one could enroll for. We want to support the aspiration of this country to be innovation hub, to be a center of technology and to eventually actualize the Silicon Savannah aspiration that was envisaged by Vision 2030. This we are linking with the Open University of Kenya, where the chancellor to ensure this platform is offered and we make university education on science and technology affordable for all Kenyans without fees. So it's interfaces maybe -- but for reliability, we want to deliver it using our technology company. Maybe Rita, maybe you could introduce yourself. People are asking who is this Rita. And then explain how will the technology group look like in 5 years. And Alex, if you help with the slide of how the structure of the technology group, I think it will be helpful. Rita?

Thank you very much, Dr. Mwangi, and Group Chair. My name is [indiscernible] I have worked for many years in the technology space, in the mobile telephony space. I started my career off in MTN in Uganda and then worked in Tanzania as well, spent a lot of time in Safaricom. I see many familiar faces here from the investor briefings at Safaricom as well and then transitioned into a mobile health platform company before joining Equity. So as Alex gets the slide, I think our mandate in the technology group is very clear. As part of the broader delivery on the Africa resilience and recovery plan, we need to develop solutions that are simple, affordable and nuanced for Africa. And these are not just digital financial solutions, but these are solutions that also integrate ecosystems. I think one of the major challenges that we face in Africa today that probably hampers our scaling is the fact that we are quasi digital. So some processes are digital, but some processes are also extremely manual. And you see this in every ecosystem that you look at the big ecosystems in Africa, whether you're looking at agriculture, whether you're looking at health or education. And so our mandate is very clear. It's not just about delivering financial services that drive inclusion, but also working to digitize ecosystems and working alongside with partners because we realize that we cannot do that on our own. The second thing that we are mandated to do is we, of course, are part of the Equity Group, and we need to be able to orchestrate the licenses that we have. If you look and you look at all the licenses that we have, even just within the Equity Technology Group, we have a PSP or mobile money license, we have a telco license, but we have a banking license. We have an insurance license. We have an investment license. So orchestrating all these licenses into a single digital interface that customers can simply use that is also nuanced for Africa, that is nuanced for our unique -- Africans, we have a different way of consuming digital products. And therefore, it needs to be nuanced. And we recognize that what works in Kenya may not necessarily work in DRC in the same way. And so it is our mandate to be able to build that. And we work based on the platforms that we have. I think in the past, we've spoken a lot about the platforms that we have built to date and the robustness of our platforms. But I think now it's time for the platforms to begin to deliver some ROI. And we hope that once we have delivered this within the group, we can also then turn around and sell it also and support some of our customers. So in 5 years, what do we see? We see, I would call a technology financial jam, that's what I would call it, because if you look at the capabilities that we have and the customer base that we have and the skill set that we have, when we orchestrate all these 3 and we begin to play at scale, I think it's quite clear that the size of the technology platform or the size of the technology group and what it will be able to do not just within the countries that we are operating in, but even beyond because technology bridges distance, technology is a great equalizer and technology creates access at the last mile. So in summary, that is what we see ourselves as a technology group. This is what we are working towards. And very soon, you'll be hearing more about some of the things that we'll be doing. Thank you.

Thank you very much, Rita. So broadly, change Equity from a brick-and-mortar business to a technology platform, but with banking licenses, with insurance licenses with investment licenses. So you can save, you can insure, you can borrow, you can transact and you can invest. And of a size already exceeding KES 2 trillion balance sheet and a marketplace with more than 22 million customers. That's the asset orchestration. I know we have taken long. There may be time for one more question if there's a banking question.

Mine is a very quick one. I know that as at 1st of September, banks are supposed to be operating under the new interest rate regime, KESONIA. Now I just want to find out how is the application of that going on? Is that already happening at Equity? And what is the impact in terms of the difference between interest rates that you're now charging based on that new model as compared to the existing loans? Now I don't want to find out because I think by -- is it February next year -- by March next year, all of them are supposed to have been converted to the new regime. I mean that's a lot of loans to deal with. What is there in terms of the preparation to achieving that?

Thank you very much, Olo. And you would have seen a concerted combined effort between the industry KBA together with the Central Bank in getting us to a pricing model that is more transmissive and the whole concept of moving to KESONIA or a new risk-based pricing model is to ensure that government policy or Central Bank policy is easily transmittable whenever there is a rate change. The new risk-based pricing model is driven towards ensuring government policies transmitted as opposed to any adjustment, particularly on rates. So what are we doing as a bank? As you said, this is a major move and the risk-based pricing model has 2 phases. The first phase kicks on 1st of December for our new clients that's new to bank. Then there's a second phase, which is end of February that kicks for all existing customers. So the preparation has been intense as a bank to ensure that we are able to ensure by 1 December, our new customers are able to enjoy the new framework, which is KESONIA, as you did mention. There will be a lot of system improvements that we are working on to ensure that we are able then to track KESONIA. As you'd appreciate, KESONIA is a daily rate to ensure that we're able to track KESONIA. But the most important one for us is to carry our customers along. So in the month of November, there's a lot of customer training as to what is KESONIA, what does it mean to you at an individual borrower level so that you're able to understand it that when we go live, then customers have full appreciation of how the model would work. There are other nuances that we are getting ourselves ready. But most important is to ensure that our customers are able to fully understand what's this new framework because it will be different from the current pricing models. But as I said, the whole essence of the pricing model is to ensure transmissibility of government policy.

A question from [indiscernible] Capital. Lydia Ndirangu, are you in the house? Very good. The question is yours. What led to the lower effective tax rate? And the second question, is this lower tax rate sustainable? And if yes, for how long?

Thank you very much for that question. First of all, let me say, at EGH, we have taken a position where we believe in transparency and good tax practices. So even in the last integrated report and even in the sustainability report, we did demonstrate in terms of how we are positioned in terms of our tax position for transparency and what is our position on it. So on the efficient tax position that we have, we have ensured that we have fast adapt to all regulations. In order to make sure you're tax efficient, number one, you have to make sure you do not have penalties in place. So that has improved in terms of our tax efficiency. Then number two is making sure we have proper interpretation of the law and minimize all tax disputes that you have to make sure that we are in good relations and in good standing with all our revenue authorities in all the markets that we operate. Then secondly, in terms of our tax positioning and making sure when we are doing our investments, are we being tax efficient in terms of the investment books we hold when it comes to our position in terms of the bonds that we hold and making sure that we take the tax advantage that are actually provided for in the law. Then when we look at in terms of how sustainable is that tax efficient or the effective tax rate that we have, we believe it's going to be sustainable. The reason being is when you look at how we've positioned in terms of our tax policy, the tax practices that we have observed, the good relationship that we maintain and also believing that we have to pay the right amount of tax. So that position from a tax sustainability position, it's going to be sustained.

I would say it's also practices before she leaves how have you positioned your asset portfolio from a tax perspective? Have you planned tax effectively and efficient? Do you want to talk a little bit about that?

Yes. So when you look at even our balance sheet in terms of how we have....

Maybe Chief Finance Officer, do you want to add an answer to that question? Continue...

Thank you. So when you look at how we've positioned our balance sheet and even the assets that we hold and the bonds that we hold, we've ensured that when we look at the bonds that we hold, the investment bonds that we have and the tax efficiency that they give us, it gives us a good position, and that's why you're seeing the effective tax rate, let's say, for Equity Bank Kenya is currently at 11% because of how we are holding our assets and also ensuring that from the P&L we have and also the balance sheet that we have, ensuring that in all those positions, we are actually tax efficient. And you'll see the efficiency is actually being brought by the balance sheet and the P&L from Equity Bank Equity Bank Rwanda and also from EBCDC.

Anything to add? And maybe just to acknowledge Lydia, you will give her back to the podium. Lydia is the Group Company Secretary and stand -- the keeper of the secrets of the Board, but also as the Group Director of tax. Maybe introduce yourself briefly.

Thank you very much, GCEO. So I've been in the bank for the last 6 years and happy to say for the -- when I came in, the tax, effective tax rate was currently at 35%, now at 11%. In terms of my experience, I'm currently almost finishing my AMP at Strathmore. I'm a [ Desmond Tutu ] fellow. I'm an advocate of the High Court. I'm a certified accountant, certified secretary, certified investment analyst and also an advocate of the High Court. Thank you.

Thank you. Anything to add to such a distinguished expert.

Thank you, Dr. James, and good morning, investors and the shareholders, very difficult to add on to that one. I think it's just to say we work very collaboratively with Lydia, as a finance team. I think from a transformation perspective, one of the things that GCEO talked about very eloquently is the journey we've been from a diversification perspective SO. the question asked was more about tax rate from a group perspective. So the diversification of our businesses across the region is one of the things that actually helps us to actually balance our tax position across the group. We actually do enjoy certain tax reliefs in certain countries because of being in a larger group. The mix of our business, the taxation of our insurance business is slightly different from taxation of our banking business. Investment in technology. And we plan these things from a capital perspective because, again, the planning, working with our tax team, the planning in terms of capital deployment, the facing of the capital actually has a lot of consequences in terms of how much tax we end up paying. We work very closely with our treasury team. It's all planned in terms of deploying of capital, the investments we make, what the tax rate applicable to the investment in terms of government paper, not just in Kenya across our various markets. So it's a very coordinated approach anchored to the diversification of the group, our assets, our product mix and our future investments from a capital perspective.

But maybe specifically, and Christine Browne, if you are in the house, one of the biggest opportunity we have been given is effectiveness in debt collection. If you look at our stock of nonperforming loans as a absolute number, this year, it has reduced by over KES 10 billion, from KES 124 billion to KES 111 billion. That portfolio, when we provided for it, it was not allowed for tax. When it comes back on correction, then it is not taxed because you don't do double taxing. When it comes to correction, the suspended interest, anything that we wrote off in the past, the provisions when it comes because it was never allowed for tax, it's now not taxable. And maybe you could give how long is the runway for a lower tax because of correction and in what kind of buckets for the next 3 years.

Thank you very much, James. Looking at the work that we've put in, in the last, I can say, close to 4 to 5 years, we see the runway to be quite short. There's a lot of closures that we expect within the next 6 to 9 months. And then I think up to end of next year, we should see significant uplift in terms of our collections and therefore, a pass-through to tax in terms of the benefits that we'll be able to accrue. James, I say this and with confidence because over the last 4 to 5 years, we've spent a lot of time working our way through the courts. We've spent a lot of time sharing the lessons that we've learned over the years, both with our Board credit committees as well as our credit colleagues. And we see the benefits creeping in because when we look at the slippages in the last 3 years, we see that it is significantly muted. So the legacy names that we are trying to close and the benefits then therefore, that will creep in the books and will be evident in the books of the subsidiaries as well as the group is coming from the legacy. And James, you did mention earlier to the investors that we should be able to see by the close of the year, NPLs coming to single digit, 10% and below. And thereafter, in the coming years, we should be able to see this enhancing. And with the growth path that we have in terms of the pipelines, we should also again be able to see this significantly managed across the group. Thank you.

I don't want to deny you a chance to introduce yourself. You might quarrel with me after this.

I'm no stranger to the investors, James. My name is Christine Browne. I am an advocate of the High Court of Kenya. I'm a Chevening scholar. I have a masters in law. I'm a certified mediator. I am an arbitrator as well. And I have worked within the development finance institutions, at the World Bank and the East African Development Bank, and I've been in Equity Group. This is my 11th year in different roles, and I'm happy to continue supporting the cause. Thank you.

So Equity is an equal opportunity employer. As you can see, sometimes people overate what I do. As you saw today, I chose not to answer any question and give -- these numbers don't belong to me. I'm just the face of the organization. The number belongs to the people who are answering the question. And as you can see, I picked them randomly based on the question. Any of my leaders in this room is of that caliber. So you can imagine the depth and the capability of this bank going forward. And as you can see, it's a younger generation below 40, most of them. So essentially, we have trained up to the fourth level, and they are always in this room so that I can be coached and mentored. That's why Christine, I'm not stranger to investors. I've been talking to them. You give opportunity to your staff so that shareholders can get confidence on the investment we have made on the human capital. I said this because I regret that the value of human capital is never put on the balance sheet. If it was ever to be put on the balance sheet, this organization would have a massive balance sheet. But I also appreciate that the market is able to see through it. And that is why Equity has a brand value. It recognizes the human capital has not been priced. So it has come as brand value, and I'm glad we are the highest valued brand in the region. I want to thank you for coming for the investors brief. We have -- it has been very engaging, but we hope we have provided you with adequate information. I see Alex has made the booklet ready. It may be longer than the one the slides I spoke to. I didn't speak to all the slides here. We do that lengthy format so that this information, you can use it for your own purpose in decision-making. So we are sharing information to assist our followers, our investors to deepen their understanding of the market and where we are and the trends. Once again, I thank you very much. And if we don't meet before Christmas because the next investors briefing will be in the new year, here, I come to wish you a happy -- to wish you happy holidays. Thank you very much. I'm reminded I have 2 Chairman in the room. I met with you and just to say hi to the people. We can give you the podium and then I invite Professor Macharia as you close. And if there is anything you want to say about DRC, but briefly, Chairman.

Thank you, Dr. James, for giving me the opportunity to greet all our investors in this room. I'm representing DRC. What I can tell you is that we, as the leadership of the DRC subsidiary, we are committed to provide improved numbers, which will contribute more to those ones that have been presented to you by Dr. James in the coming future. In fact, DRC has a great room of opportunity for improvement. And I think that what I can say is that you can count on us to turn the trend or to provide continuous growth and capacity expansion to the group as an additional contribution to what all the subsidiaries are making to the group office. Thank you.

Professor Macharia. Meti -- Chairman Meti used to be the long-serving Chief Executive of Citibank in DRC, among other distinguished careers.

Thank you, James. I note that we've been here for about 3 hours, and I can see there's still a lot of interest and the investors, our staff and the members who are here have taken a lot of interest to the presentation today. I have been involved with Equity Bank for about 10 years. First, Equity Bank Kenya and then at a group. And in those 10 years, I have seen an organization that have completely transformed itself, but I can now confidently say we are at the cusp of real great things because we put into play all the lessons that we have learned over those 10 years. I want to thank our members who have stood with us through thick and even when we have seemingly fallen short of your expectations. But it's because of the fact that you have believed in us that we have exerted ourselves to be able to give you experiences that will even attract more members to us. James has been able this morning, in addition to presenting figures to also showcase what kind of organization that we have built through giving opportunities to our ExCo members to answer questions and demonstrate to investors and our customers that you are really in good hands. If I had the same opportunity as James has had this morning, I would also have been able to showcase the caliber of our group. Our Board members, both at the group level and at our subsidiaries. In the last 2 years, we have completely revamped our boards to reflect the challenges and the opportunities that we have -- we have brought in global capabilities in our boards. As you can see, when we started, it was Equity Bank Kenya. Now we have 4 groups. Each of those groups have subsidiaries. And all that means that we also needed to reorganize the Board so that they are able not only to oversee, but also to develop long-term strategy that will ensure continued growth. I can say, watch this space. Thank you very much, everyone.

Thank you, Chairman. Equity Group Holdings and Chairman, Equity BDC. Thank you, Dr. Mwangi and our colleagues. As we get up standing for the Equity Anthem, just a few announcements. like Dr. Mwangi has said, the investors' booklet will be available to us as we leave and especially for the analysts and members of the foreign state. Also at the back of the investors booklet, there are the QR codes for all the reports, our integrated report, our sustainability report, so you can also scan and download the copies. Lastly, the investor booklet together with the financials and the press statement have already been uploaded on the website. So they are available for downloading. And any questions that you might have, especially our analysts and investors, kindly send them to [email protected], and our team of Investor Relations will be able to respond to your questions. Once again, we want to thank you for your time and kindly be standing for the Equity anthem and Reverend Evans will close for us with a prayer.