Equity Bank records 21% growth in profit - CNBC Africa

Equity Bank records 21% growth in profit

East Africa

by Elayne Wangalwa 0

Equity bank has reported a 21 per cent growth in its pretax earnings in the first half of 2014.

The group’s profit before tax increased to 10.8 billion Kenyan shillings. The positive performance is mainly driven by non-funded income, which includes, bank charges, transaction fees and monthly account service charges, among others. Also the bank’s improved micro economic and investment environment that has led to economic confidence in the region largely attributes to its performance.

According to James Mwangi, Managing Director at Equity Bank, the bank’s regional expansion and diversification strategies have been successful.

(READ MORE: Kenya's Equity Bank set for mobile money market)

Present in five countries within the East African region, the subsidiaries profit before tax contribution was a total of 15.3 per cent this is despite challenges posed by the recent political skirmishes in South Sudan.

Equity’s total assets grew to 303 billion Kenyan shillings in June 2014 up from 262 billion Kenyan shillings during the same period last year. Loans and advances to its over 8 million customers was 187 billion Kenyan shillings an increase of 24 per cent up from 151 billion Kenyan shillings.

The group’s investment securities in Corporate Bonds, Commercial Paper, Unit Trusts, among others increased by 7.6 per cent to 45.3 billion Kenyan shilling in June 2014 while the Kenyan government securities reduced to 21.5 million Kenyan shillings from 21.9 million Kenyan shillings the same period the previous year.

The Nairobi and Uganda Securities Exchanges listed financial provider's mobile banking business had also grown during the first half of the year. From June 30 this yearthe bank had 3.04 million customers up from 2.78 million customers at the end of 2013.

Equity is set to launch its recently licensed Mobile Virtual Network Operatorions (MVNO) later on in the year. Equity MVNO will emulate all its banking services into the mobile phone.

“Our guiding philosophy and vision is to empower our people who are financially excluded or poorly banked access to banking and information technology solutions that are readily available to affluent members of society albeit at an affordable cost,” Mwangi said.

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