Ratio Magazine :: The Inside Track to East Africa’s Economies - EAC Regional: Press Releases: Equity Bank Group Delivers Continued Strong Growth

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EAC Regional: Press Releases: Equity Bank Group Delivers Continued Strong Growth

Friday, 29 May 2009

Equity Bank Group has continued on its path of strong growth in revenue and profitability, underpinned by a strong balance sheet. In the first quarter, total revenues and profit before tax grew to KES3.4bn and KES1.2bn, respectively, representing increases of 52% and 29%, relative to the same period last year. The group achieved this performance despite the ongoing global financial recession, coupled with the prevailing local challenges such as drought and high inflation levels.

Releasing the results, Dr James Mwangi the CEO of Equity Bank said the growth and profitability was a clear indication of the confidence level from Equity Bank customers. The bank has registered this performance and continued with its aggressive growth with full operations in Uganda with over 36 branches and gearing to open up shortly in Sudan. The results posted are attributable to balanced growth, high operating efficiency, and prudent management of risk.

Group net interest income grew by 89% to reach KES2.1bn up from KES1.1bn while total operating income went up by 52% to reach KES3.4bn from 2.2bn in the previous year.

Operating expenses grew by 69% to close at KES2.2bn as a result of significant investments which are expected to drive future growth and profitability. The increase in costs is attributed to the growth in the branch network mainly in the second half of last year and in the current quarter. These branches are yet to reach breakeven. Substantial expenses were also incurred in the enhancement of capacity and scaling up of operations to support the regional expansion programme. “While these investments pushed the cost to income ratio to 66%, it puts the bank in a strong position to generate superior performance in the future in line with our strategic focus. Discounted for the investment, the underling cost income ratio stood at 56% down from the previous year level of 59%,” noted Dr. Mwangi.

The group’s consolidated loan book nearly doubled to KES48.2bn up from KES24.3bn last year a growth of 98%. Despite this rapid growth the bank has maintained a high quality asset portfolio relative to the market.

Deposits grew by 57% to close at KES53.7bn from KES34.2bn as at the end of the same period last year. The number of customer accounts grew to 3.6million as at the end of the first quarter up from 3.3million reported at the end of the year 2008 and 2.1million in quarter one of 2008.

The bank has maintained high liquidity levels, closing the quarter at 40% against the statutory minimum of 20%; while core and total capital adequacy stood at 28% and 38% respectively. “This solid base positions the Bank well for future growth, and enables the bank to withstand any shocks that may arise due to the on going global recession and local economic slowdown. “We are well placed to continue with our vision of being the champion for the social-economic prosperity of the people of Africa” noted Dr James Mwangi
At the recently held 2009 Kenya Banking Awards, Equity Bank was declared the Best Bank in Kenya for the second year running, while at the same time emerging the Best Bank in Microfinance, Best Bank in Technology Use, Fastest Growing Bank (2nd runner up) and Best Bank in Retail Banking (2nd runner up).

In his concluding remarks, Dr. Mwangi noted that “We shall continue to grow the bank despite the prevailing global recession and local economic slowdown, and have a very positive outlook for the rest of the year”.

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