Corporate News
By DAVID HERBLING
In Summary
- After-tax profit grew 21.4 per cent to Sh7.6 billion in the period to June 2014, compared to Sh6.3 billion in a similar period a year earlier.
- Mr Mwangi said that Equity Bank has turned to diversifying revenue streams to cut over-reliance on funded income and offset a depressed interest income yield of 300 basis points following a cut in lending rates.
Equity Bank’s
net profit for the first half of the year jumped by a fifth helped by
increased earnings from fees, commissions and low operational costs.
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The Nairobi Securities Exchange-listed lender reported
after-tax profit growth of 21.4 per cent to Sh7.6 billion in the period
to June 2014, compared to Sh6.3 billion in a similar period a year
earlier.
Equity — which controls 7.8 million deposit
accounts equivalent to one-third of Kenya’s total— exploited its large
customer base to grow non-funded income by 19 per cent to Sh8.3 billion
driven by growth in transaction and payment processing fees.
The bank’s operating expenses grew by a marginal
1.9 per cent to Sh11.6 billion in the first six months of the year,
attributed to use of low-cost service alternatives such as agency and
mobile banking.
“The growth in non-funded income was driven mainly
by the bank’s success and growth in new strategic initiatives such as
payment processing, diaspora banking and remittances,” said Equity chief
executive James Mwangi.
“We contained costs following successful deployment
of low-cost delivery channels, particularly agency banking as well as
mobile banking,” he said while releasing the results Wednesday.
The top-tier lender saw its net interest income
grow 5.6 per cent or by Sh748 million to Sh14.01 billion, owing to a
drop in interest rates.
Mr Mwangi said that Equity Bank has turned to
diversifying revenue streams to cut over-reliance on funded income and
offset a depressed interest income yield of 300 basis points following a
cut in lending rates.
Equity Bank’s income from payments processing has
grown 58 per cent to an average of Sh45 million monthly from volumes of
about Sh2 billion every month.
It now has 3.03 million mobile banking customers.
It now has 3.03 million mobile banking customers.
The bank has a total of 13,702 agency banking
outlets whose volume of transactions topped Sh62.6 billion in the first
half of this year.
Equity’s loan book grew by a quarter or 36.03
billion in the six-month period to stand at Sh186.5 billion from Sh150.4
billion in June 2013, attributed to increased lending to SMEs which now
account for 48 per cent of total loans.
The loan book quality improved resulting in
reduction of loan-loss provision charges in the period by 65 per cent to
Sh517 million from Sh1.4 billion.
Deposits grew 15 per cent to Sh214.5 billion from Sh184 billion in June last year.
hdavid@ke.nationmedia.com
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