Equity Bank Posts Outstanding Performance

Equity Bank Tanzania has posted net profit of 5.03bn/- in the year ended September 2015 compared to 1.52bn/- registered in the previous year. Also; the bank posted 1.14bn/- profit in the quarter ended September 2015 compared to 531m/- posted in the corresponding quarter 2014.

Similarly, Equity group holdings limited has posted net profit of 256bn/- (Kshs.12.8 billion) as at September 2015 up from 224bn/-(Kshs.11.2 billion) last year. Also, the Groups profit before tax grew by 14 per cent to 362bn/-(Kshs.18.1 billion) up from 318bn/- (Kshs.15.9 billion).

The Equity Group’s Chief Executive Officer, Dr James Mwangi said during an investor’s briefing session that the outstanding performance is contributed by the bank’s strategic initiatives and innovations toward enhancement of access, convenience and affordability of financial services.

He said the impressive growth is underpinned by continued investment in the innovative new channels of agency and mobile banking, success of diversification and regional expansion that saw the Group’s acquisition of Pro-Credit of DRC Congo completed and consolidated into the Group’s 3rd quarter results.

Equity Group also posted a 32 per cent growth in total assets, a growth of 2.13tri/- (Kshs.106.4 billion) to 8.92tri/- (Kshs.445.8 billion) up from 6.788tri/- (Kshs.339.4 billion). The nearly half a trillion balance sheet growth has been driven by a 30 per cent growth in customer deposits to 6.34tri/- (Kshs.317 billion) up from 4.86tri/-(Kshs.243.1 billion) during the same period the previous year.

Bolstered by the increased deposits and a focus on the SME lending, the Group’s loan book registered a 27 per cent growth to 5.27tri/- (Kshs.263.4 billion) up from 4.13tri/- (Kshs.206.7 billion) posted in September 2014, with SME segment contributing 70.6 per cent of the total loan book.

High quality loan book was maintained with NPL remaining at 4.4 per cent but with coverage increasing to 89 per cent as a result of enhanced NPL provisions which grew by 89 per cent from Kshs. 0.9 billion (18bn/-) to Kshs. 1.7 billion(34bn/-) proactively responding to the rising interest rate regime.

The Group’s strategy to de-risk profits by reducing reliance on the often volatile interest income received a major boost with fees, commissions and transaction income growing by 29 pr cent to 336bn/- (Kshs.16.8 billion) while interest income grew by 21 per cent to 632bn/- (Kshs.31.6 billion). Non-funded or non-interest income constituted 40 per cent of the total income.

Dr Mwangi said the unique achievement was as a result of pursuit of a strategy of diversifying income that saw foreign exchange trading income grow by 64 per cent, merchant banking commission growing by 59 per cent, insurance, custodial and brokerage fees rose by 91 per cent.

Diaspora remittance processing commissions grew by 20 per cent. “We are confident of sustaining this trend and are optimistic of achieving a 50:50 percent contribution between interest income and other income as the growth of the latter is underpinned and driven by the success of the SME strategy that now constitute 70.6 per cent of the loan book”, said Dr Mwangi.

Originally published on DailyNews Tanzania

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