Equity Bank records Shs.5.9 billion 2018 quarter profit

BUSINESS

Share!

Equity Bank, Kenya biggest bank in terms of customers recorded a profit after tax of Shs 5.9 billion in the first quarter of 2018 up from Sh 4.9 billion over the same period in 2017 representing an increase of  22 percent. This is according the bank’s 2018 Q1 financials released yesterday.

The Bank attributed the profit growth of profit to a differentiated strategy and business model, and strong execution leadership. The group customer base grew to 12.2 million, and Customers’ deposits grew by 9% to reach Kshs.382.4 billion up from Kshs.349.3 billion.

‘’The operating environment is showing signs of recovery across the region with the Group’s key market, Kenya, done with its elections and business activity starting to pick up. At the same time Kenya is planning to scrap interest rates capping that was introduced in September 2016. Across the region, economic growth is expected to improve with Kenya’s GDP growth rate projected at 5.5 percent up from 4.8 percent. Uganda’s GDP projected to grow at 5.9 percent up from 4.8 percent, Rwanda’s GDP growth rate expected to reach 7.2 percent up from 6.1 percent,” said the Bank’s chief executive Mr James Mwangi.

A major objective of the new business model has been to enhance the quality of earnings and this saw non-funded income contribute 41% of the Group’s first quarter total income of Kshs.16.5 billion. Non-funded income streams saw trade finance income grow by 32%, merchant commissions by 23%, mobile banking commissions by 75%, Bond trading income by 152%, Swift & RTGS income by 45%.

Diaspora remittance grew by 183 percent during the period under review and this follows the reduction of commission charged by the bank on PayPal transactions.

Subsidiaries grew their profit contribution by 65% to Kshs.1.5 billion with Equitel’s profitability growing by 204%, Equity Bank South Sudan by 291%, Equity Investment Bank by 481%, Tanzania by 68%, DRC by 78%, Rwanda by 58% and Uganda by 28%.  Digital mobile lending saw 92% of all loans processed online.

Non performing Loans remained at 6.3% against an industry average of 12%. IFRS 9 provisions enabled the Group to achieve a 105% NPL coverage.

This comes at a time the Central Bank is considering removing interest rate capping laws that were introduced in 2016 but have been blamed for the low economic growth in the country.

Another tier 1 bank and Kenya’s biggest bank in terms of branch network KCB recently announced a profit after tax of Sh 5.18 billion over the same period.

Facebook Comments

Tagged
Peter Omondi
I have a nose for business news and trends. Got a tip? Hit me up. Email info@techtrendske.co.ke or p.omondi@techtrendske.co.ke is my email.
http://techtrendske.co.ke

Leave a Reply