Everything you've learned so far assumed a company that sells products or services. A bank sells something stranger — money itself — and that changes what "revenue," "assets," and "liabilities" even mean.
So far this course has used Safaricom — a telecom company with revenue from customers, inventory, equipment, and straightforward costs. Now meet Equity Group Holdings PLC, one of Kenya's largest banks, listed on the Nairobi Securities Exchange under ticker EQTY. Its financial statements use the same three-statement structure you already know (income statement, balance sheet, cash flow statement) — but the line items inside them look unfamiliar at first glance, because a bank's core business is fundamentally different from Safaricom's.
This lesson has one job: help you recognize why a bank's statements look different, so the unfamiliar layout doesn't trip you up. We won't calculate anything yet — that comes in the next two lessons.
Safaricom sells airtime and data. Equity Group sells... money. Specifically:
That's the core of banking: take in deposits (a liability), lend them out as loans (an asset), and earn the difference between the interest charged to borrowers and the interest paid to depositors. Compare that to Safaricom, which has no deposits and no loan book at all — its assets are things like network towers and cash, not IOUs from customers.
The fundamental rule from Lesson 2 still holds for a bank: assets = liabilities + equity. What changes is what counts as an asset or a liability. For Safaricom, a customer's unpaid bill is an asset (they owe Safaricom). For Equity Group, a customer's deposit is a liability (the bank owes it back to them) — the exact opposite direction of "who owes whom" that you might instinctively expect.
Below is a simplified extract of Equity Group's audited balance sheet for FY2024, showing just enough to see the deposits-and-loans structure. We'll return to this table in full in Lesson 8.
| Shs'000 | 2024 | 2023 |
|---|---|---|
| Loans and advances to customers (net) — an asset | 887,379,832 | 819,235,956 |
| Total assets | 1,804,624,428 | 1,821,434,520 |
| Customer deposits — a liability | 1,399,648,121 | 1,358,227,584 |
| Total liabilities | 1,557,758,334 | 1,603,299,418 |
| Total shareholders' funds (equity) | 246,864,094 | 218,135,102 |
Source: Equity Group Holdings PLC Audited Financial Statements and Other Disclosures for the Year Ended 31 December 2024 (audited by PwC; consolidated Group figures, currency Shs'000).
Notice two things immediately: the units are different — Equity Group reports in Shs'000 (thousands), while Safaricom reports in KShs millions. Always check the unit label before comparing two companies' numbers, or you'll be off by a factor of 1,000. And notice the shape: loans (an asset) and deposits (a liability) dominate the balance sheet — there's no inventory, no property-heavy asset base like a telecom company. A bank's "product" is money itself.
Safaricom's income statement starts with one clean "total revenue" line. A bank's income statement instead splits income into two very different sources:
The bank also pays interest expense — the interest it pays out to depositors and other lenders. The gap between interest income and interest expense is called net interest income, and it's the closest thing a bank has to Safaricom's "gross profit on its core product." We'll unpack that calculation with real Equity Group numbers in the next lesson.
If you compared Equity Group's balance sheet directly to Safaricom's without knowing this, you might wonder why a bank carries so much more debt-like liability (deposits) relative to equity than a telecom company does. For a bank, that's completely normal — deposits are the raw material of the business, not a sign of financial distress. Judging a bank's balance sheet by a telecom company's yardstick would lead you to the wrong conclusion. Lesson 12 comes back to this point directly.
Next lesson, we'll dig into Equity Group's income statement in detail and calculate its net interest income — the spread between what it earns on loans and what it pays on deposits — using its real FY2024 figures.
Primary source for this lesson's numbers: Equity Group Holdings PLC Audited Financial Statements and Other Disclosures for the Year Ended 31 December 2024.
Something unclear, or want to dig into a line item we skipped (like "what counts as a non-interest-bearing asset")? Ask your teacher — that's what these sessions are for.