Equity bank has reported a profit after tax of Kshs 18.9 billion for the year ending December 2017 up from Kshs 16.6 billion a year before, representing an increase of 14%.
In a press briefing held today at the Bank’s headquarters in Upper Hill Nairobi, the bank attributed this growth in profit to increase in diaspora remittance, increase to the number of tourists visiting the country and stability in foreign exchange, regional diversification, digitization and structural efficiencies.
The group, however, reported a decrease of Kshs 9 billion in loan interest income a drop from Kshs 43 billion to KSHS 34 billion signifying 21% due to the interest rate caps.
Regional subsidiaries contributed 14% of the group’s total profit up from 7 %. Ugandan subsidiary grew its profit by 87%, DRC 60%, Tanzania 18, %Rwanda 87% and South Sudan by 113% and its insurance by 94%.
‘’ The contribution by our regional subsidiaries changed the equation for us. We can see the role of diversification in moving sovereign risks particularly with policy changes and of course different lines of business. Questions had been asked before and we can see the subsidiaries growing to size and we expect this year they will be able to punch over their weight and we looking forward of them contributing between 20 to 25% of gross profit of the group.’’ Equity bank chief executive officer James Mwangi.
Non-performing loans decreased from 10.6 % to Kshs 6.3% despite the interest rate cup rating regime. Its mobile money service processed 251.6 million transactions which is 54% of all transactions, its mobile app processed 92.8 million which translates to 20 % of all transactions while agency processed 62 million transactions and branches 18 million transactions. Customers deposits also grew by 11 %
Income from Treasury Operations increased by 59% to Kshs 19.2Bn from Kshs 12 billion YoY driven by an increase in government securities portfolio to Kshs 128 billion from Kshs 100.6 billion and increasing its contribution to the total income by 25%.
Diaspora remittance grew by 132% to Kshs to 30 billion from 19.2 billion. This, the bank says was due to partnership with online money transfer service PayPal, Equity Direct, Western Union and Moneygram.
The bank’s total assets grew by 11% to 524.5 billion up from 473.7 billion.
This comes at a time when other top-tier banks have reported a near flat or decrease in profit. The Co-operative bank reported a profit of 11.4 billion down from 12.7 billion in 2016 while Kenya’s largest bank in terms of branch network KCB reported a profit of shs 19.7 billion for the year 2017 while Barclays bank which announced recently that it will change its name to ABSA reported an after-tax profit of sh 6.93 billion.