Equity Group made Ksh 6.9b profit before tax and grew its balance sheet by 14% to KShs 492Bn up from KShs 430Bn driven by an 18 percent growth in customer deposits in Kenya and 16% at the Group level against flat growth of the Kenya banking sector.
Even though it had to shut down several of its branches in South Sudan, the Group leveraged on its wide network and brand to grow its deposit base to Kshs 349.3bn from Kshs 300.3bn.
Speaking during the investor briefing and release of its quarter one 2017 results, the Group Chief Executive Officer Dr. James Mwangi said, “A cautious approach in credit underwriting because of inability to price risk saw the loan book decline by 5% from KShs 275Bn to KShs 262Bn. The increase in funding was invested in government securities which on a risk adjusted basis currently yields similarly to loans, and yielded about 12%. Government securities grew by 81% from KShs 62B to KShs 113B with the highest growth experienced in Kenya where government securities grew by 154% from KShs 42Bn to KShs 105Bn.”
The Group also saw its mobile banking transactions grow by 75% to Kshs 308.8mn up from Kshs 176.9mn while Trade Finance grew by 78% to Kshs 282.8mn from KShs 159. On the other hand the Group’s Diaspora Remittances grew by 79% to Kshs 130.1mn from 72.5mn; agency banking by 19% to Kshs 206.4mn from Kshs 172.8mn and merchant commissions by 8% to Kshs 279.2mn from Kshs 258.3mn.”
The growth in mobile transaction was due to the bank’s new digital banking platform dubbed Eazzy Banking which brought convenience in the banking sector. Eazzy banking App transactions grew by 28%; Eazy Biz by 56%; EazzyNet by 32%; EazzyPay by 171%.
The Group’s effective cost management resulting from a shift from fixed cost to variable cost delivery channels, digitization and pursuit of efficiency saw total cost decline from Kshs 8.4Bn to KShs 8.3Bn with Kenya which is ahead in digitization reducing its total cost by 5% compared to a growth of 8% last year. The Group posted a zero growth in cost compared to 17% growth in similar period last year. Cost to Income ratio remained constant at 49% at the Group and at 43% for Equity Bank Kenya.
The Group’s regional expansion has started paying off with regional banking subsidiaries increasing their contribution to the Group’s profits from 5% to 10% with Uganda growing by 194%, DR Congo 182%, Rwanda 117% and Tanzania 45%.
Profit before Tax declined by 5% to KShs 6.9Bn down from KShs. 7.3Bn while Profit After Tax declined by 5.5% to Ksh4.9Bn down from KShs 5.1Bn. Equity Group maintained an impressive ROE of 24% and a 4% ROA.
