Equity Bank profit before tax grows by 29%
July 26, 2012…. Regional banking group, Equity Bank continued to maintain its growth momentum with the profit before tax growing by 29% to close at Kshs 7.62 billion in the six month period ending June 30th 2012 despite the challenging micro-economic environment characterized by high inflation, interest rates hikes and foreign exchange volatility. This is due to the rise in total income by 34% from Kshs 13.15 billion to Kshs 17.56 billion mainly driven by the growth in the loans and advances, as well as prudent cost management measures.
During the period under review, Equity Bank Group’s loan book grew by 27% from Kshs 97.7 billion to Kshs 124.4 billion. Total assets grew by 29% from Kshs 171 billion to Kshs 220 billion compared to June 2011. Customer deposits also grew significantly by 22% from Ksh124 billion to Ksh151 billion. This is mainly attributed to the growth in customer numbers which increased from 6.3 million to 7.8 million. This growth is also as a result of innovative use of alternative delivery channels such as agents and the bank’s mobile banking platform popularly known as Eazzy 247.
The brand of the bank has also continued to strengthen resulting in the bank attracting more customers and transactions. The continued roll out of the agency banking in 2012 has seen the number of agents grow to 5,004 from 2,301 as at June 2011 which represents a growth of 117%. The bank agency network is processing 25% of all cash transactions and this has enhanced access by the customers to the bank’s products and services and also enhanced convenience.
The Group continued to be well capitalized as reflected by the 27% capital adequacy ratio which is well above the 12% statutory requirement. Similarly the liquidity of the bank stood at 39% well above 20% statutory requirement.
Speaking during the announcement Equity Bank’s CEO and Managing Director Dr. James Mwangi said, “Our growth in first half of 2012 is a demonstration of the robustness of the business model with the ability to generate steady returns despite the current challenging operating environment. We will continue to leverage on the business model and innovation such as agency banking and mobile- enabled technology to create more efficiency and accessibility.
The awarding of Equity Bank’s CEO Dr. James Mwangi with the 2012 Ernst & Young World Entrepreneur of the Year was a clear testimony of the bank’s constant focus on exceptional customer experience, relationship banking, capacity building among staff and an effective governance structure, which have all led the Bank to become a leading all inclusive commercial bank with an asset base of over Kshs 220 billion. It has also created huge social impact through enhancing financial access and social interventions through scholarships and financial literacy programmes.
“Africans are embracing the power of entrepreneurship to change the economic and social state of Africa, so as to solve the African paradox of a continent endowed with resources, human capital and yet weighed down by abject poverty,” said Dr. Mwangi.
Equity Bank is one of the most profitable companies in East Africa with a regional presence in five countries namely Kenya, Uganda, South Sudan, Rwanda and Tanzania. Since listing in 2006, Equity Bank’s shareholder value has grown tremendously creating immense wealth for shareholders. From a customer base of 27,000 in 1993, the bank is now home to 7.8 million accounts accounting for over 50 percent of all bank accounts in Kenya. Equity Bank is the largest bank by customer base in Africa with a focus on providing affordable, accessible and relevant products and services at the bottom of the pyramid.