Ratio Magazine :: The Inside Track to East Africa’s Economies - Kenya: Press Releases: Equity Bank Post 42% Increase in Q3 Profits

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Kenya: Press Releases: Equity Bank Post 42% Increase in Q3 Profits

Monday, 24 October 2011

Nairobi, 24 October 2011 --- Despite the challenging economic environment, regional financial services provider Equity Bank Group pursued its strategic focus on customer convenience, satisfaction and diversified delivery channels and managed to post a 42% after tax profit to close it’s the third quarter of its trading period ending on 30 September 2010 at KES7.3bn, up from KES5.1bn registered during the same period last year.

The bank’s profit before tax grew to KES9.1bn, up from KES6.5bn, fueled by a total income growth of 24% from KES16.5bn to KES20.5bn in the same period.

Sustained marketing efforts under the bank’s ‘Ndio Hii Hapa’ campaign resonated well with the market. The bank’s customer base continued to grow and has now hit the 6.7m mark, making Equity Bank the largest bank by customer base in sub-Sahara Africa.

Within the same period, deposits grew by 51% to close at KES149.7bn, up from KES99.2bn posted during the same period last year. This was attributed to the bank’s fast expanding Equity Agents customer delivery channel and Financial Literacy (FiKA) training initiative.

Speaking when he released the bank’s third quarter results during a breakfast investor briefing session at Equity Centre, Equity Bank Group Managing Director Dr. James Mwangi disclosed that the bank will maintain its strategic focus in the fourth quarter to sustain the current growth momentum.

“Although the operating environment is expected to be challenging especially due to the inflationary pressures arising from high fuel and food prices, our customer and shareholders promise to deliver on the strategic objectives remains on track,” Dr. Mwangi said. “Going into the fourth quarter, we anticipate better performance for the group with sustained focus on further increasing our customer value proposition.”

Dr Mwangi attributed the more than impressive results and achievements to staff motivation and productivity, improved efficiency, resilience and robustness of the Equity business model, the benefits of economies of scale arising from size and growth; and improved quality of the loan book.

In tandem with the growth, the bank’s total operating expenses also grew by 14%, up from KES10bn to hit the KES11.5bn mark in a development attributed to a 9% increase in staff costs which now stands at KES4.1bn, while the group's cost to income ratio improved from 50% to 48% in the same period.

Asset quality improved by 53% to 1.3%, from 2.7% for the same period, despite loans and advances growing by 54% to KES109.4bn, up from KES70.9bn posted in the same period.

During the period under review, non-interest income grew by 15%, up from KES8.1bn in September 2010 to close at KES9.3bn, driven mainly by transactions income, fees and commissions income.

Equity Bank Group’s total assets grew by 43% to close at KES195.4bn, up from KES136.6bn in September 2010, with the most significant growth being achieved in the core operational segments featuring loans and advances and cash and bank deposits which grew by 54% and 112% respectively.

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