Equity Bank CEO James Mwangi cited private sector loan growth and lower
operating costs as key drivers of the bank’s performance. FILE
By David Herbling
In Summary
- Equity Bank’s net profit increased by 22pc to Sh3.2 billion for the first quarter, buoyed by higher net interest income and lower operating costs.
Equity Bank
shrugged off the poll shocks and uncertainties that surrounded the
Kenyan General Election to grow earnings by a fifth in the first three
months of this year.
The regional lender’s net profit increased by 22
per cent to Sh3.2 billion for the first quarter, helped by growth in its
loan book and a drop in the cost of funding as a result of lower
interest rates.
Lending to the private sector, mostly small and
medium enterprises (SMEs) was up 15 per cent to Sh139 billion compared
to Sh121 billion in a similar period last year.
“Private sector loan growth and the reduction in
the cost funding were the key drivers of the bank’s performance,” said
Equity Bank CEO James Mwangi at a press briefing Monday.
“It was tough period as businesses deferred decisions due to the electioneering period and the government halted tender payments to SMEs.”
The bank’s interest expense dropped by a third to
Sh1.1 billion compared to last year’s Sh1.6 billion; as it paid lower
interest rates for term deposits. Operating costs increased by 10 per
cent to Sh5.1 billion.
Mr Mwangi said the lender plans to roll out countrywide its payment processing solutions such as BebaPay and MasterCard mobile point of sale (mPOS) units to marshal cheap deposits and earn commissions.
Equity Bank also plans to grow its agency banking
footprint, currently numbering 6,900 outlets as a strategy to reduce the
congestion in its banking hall.
The contribution of subsidiaries to Equity’s
bottom line dropped from 15 per cent in the quarter ending December to
12.5 per cent in what Mr Mwangi attributed to the halt in oil exports by
South Sudan and Rwanda’s frosty relations with development partners
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