Equity Bank expects rise in regional profits in 2016
08 March 2016, 21:20
Nairobi - Equity Bank expects its regional subsidiaries to more than double
their contribution to group profit this year as lending through its
mobile banking business continues to grow, it said on Tuesday after
posting a 7 percent rise in profits.
The bank said its pretax
profit rose to 24 billion shillings ($237 million) from 22.4 billion
shillings a year earlier, helped by a near 17 percent rise in net
Equity, which also operates in Uganda, Tanzania,
South Sudan, Rwanda and Democratic Republic of Congo, said these
subsidiaries contributed 23 percent of total assets, 23 percent of total
deposits, 17 percent of its loan book and 6 percent of the group's
"We want to make Tanzania, Uganda, Rwanda, Uganda and
Democratic Republic of Congo to contribute at least 30 percent of the
assets ... and hopefully contribute 15 percent of the profitability,"
Chief Executive Officer James Mwangi told an investor briefing.
said 2015 had been a difficult year due to a depreciation in regional
currencies against the dollar, especially in conflict-stricken South
"Last year was one of the most turbulent in terms of
macroeconomic environment. We saw significant devaluation of the South
Sudan pound, where the currency was devalued by 84 percent," he said.
"We also saw in the fourth quarter, particularly in Kenya, significant interest rate volatility," he said.
The yield on Kenya's
91-day, 182-day and 364-day Treasury bills surged above 20 percent at
the start of the fourth quarter, before sliding below 13 percent by the
end of the year.
The bank, the biggest in Kenya by
number of depositors, said profits rose due to a jump in net interest
income to 34.1 billion shillings from 29.2 billion shillings last time.
loan book expanded to 269.9 billion shillings from 214.2 billion
shillings while the ratio of non-performing loans to total loans fell to
3.3 percent from 4.2 percent in 2014.
Equity said 78 percent of
the group's loans were made through its mobile banking service, with 72
percent of lending going to small and medium businesses.
"We see the future to be driven by the digital bank, not the bricks and mortar," Mwangi said.
said total assets rose to 428.1 billion shillings from 344.6 billion
shillings, while customer deposits rose to 302.2 billion shillings from
245.6 billion shillings.
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