Equity Bank records Sh5.9 billion profit in first quarter

Brent Malahay, Equity Bank Group Director Strategy, Partnerships and Investor Relations looks on as Equity Group Managing Director and CEO confers with one of the analysts during the release of the 2018 Q1 Financial Results at Equity Centre, Upper Hill. IMAGE/COURTESY

Equity Bank has recorded a 22 per cent increase in net profit of Sh5.9 billion in the first quarter ending March 2018.

Last year, in a similar review period, the Bank recorded Sh4.9 billion in net profit.

The profit rise was attributed to innovations, investments in customer satisfaction that resulted in the review of their business model and strong execution of the same.

Within the period, the bank attracted 1 million new clients to reach a customer base of 12.2 million.

Customers’ deposits grew by 9 per cent to reach Sh382.4 billion up from Sh349.3 billion, boosting the balance sheet to top half a trillion shillings.

MERCHANT COMMISSIONS

Non-funded income contribute 41 per cent of the Group’s first quarter total income of Sh16.5 billion. The income streams saw trade finance income grow by 32 per cent, merchant commissions by 23 per cent, mobile banking commissions by 75 per cent, Bond trading income by 152 per cent, Swift & RTGS income by 45 per cent and Diaspora Remittances by 183 per cent.

Geographical and business diversification saw the subsidiaries significantly increase their profit contribution from 14 per cent to 19 per cent of the Group’s total profit, delivering on the Group’s objective of de-risking concentration.

Further its subsidiaries grew their profit contribution by 65 per cent to Sh1.5 billion with Equitel’s profitability growing by 204 per cent, Equity Bank South Sudan by 291 per cent, Equity Investment Bank by 481 per cent, Tanzania by 68 per cent, DRC by 78 per cent, Rwanda by 58 per cent and Uganda by 28 per cent.

DIGITAL BANKING

Digitization of services saw customers process 97 per cent of all their transactions outside the high fixed cost brick and mortar branches.

Digital mobile lending saw 92 per cent of all loans processed online, making banking intermediation what you do on devices rather than the place you go to.

Total income grew by 9 per cent even with interest rates capping.The Group sustained a high-quality loan book, with non per forming loans remaining at 6.3 per cent against an industry average of 12 per cent. IFRS 9 provisions enabled the Group to achieve a 105 per cent NPL coverage.


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Muhatia
Trust is my currency, biscuits are my best snacks. A business story by me that has sparked change, informed and made a positive difference is what makes me going. I yearn to achieve more through writing Reach me via editor@biznews.co.ke