James Mwangi Euity Bank
Equity Group Managing Director James Mwangi . He employs savvy tactics to keep ahead of competition.

Equity Group staff numbers declined by 360 in 2015 and management expects a 5 percent dro this year as service delivery moves away from branches. The firm invested Sh8 billion in Information Technology in the last two years that has seen volumes of transactions on digital channels increase significantly, reports Capital FM.

“With virtualisation we knew the transactions in the branches and ATMs will start declining so we allowed natural attrition and we will continue with this,” said Equity Group Chief Executive James Mwangi. “Anybody leaving the bank will not be replaced and the existing staff we are now retraining them to do SME banking, corporate banking and insurance and so we are not retrenching anybody.”

The bank reported Ksh17.3 billion net profit for the full-year 2015, a one percent increase compared to 2014’s Ksh17.2 billion. Pre -tax profit stood at Ksh23.9 billion representing a 12 percent growth compared to Sh22.3 billion.

“The tax rate in 2015 is much higher than 2014 and it’s because in the profit of 2014 there was a capital gain of Ksh1.6 billion the profit we made out of sale our shares in Housing Finance. That was not taxable, that explains the difference between the net and the gross profit,” Dr Mwangi explained.

Agency banking transactions increased by 35 percent in the period under review to reach 51.3 million transactions valued at Sh341.5 billion while transactions on its mobile banking platform Equitel increased by 1000 percent to hit 151 million transactions valued at Sh114.9 billion.

Volume of total loans disbursed on mobile phones reached 8.5 billion on account of 1.9 million loans with the total number of mobile loans accounting for 78 percent of all the loans disbursed during the year.

“On a daily basis we are receiving 50,000 loan applications from Equitel. Those borrowing for a month we are seeing an average loan of Ksh7, 000 ; those borrowing for three months we are seeing an average loan of 40,000 and those borrowing up to a year we are seeing an average borrowing of up to Ksh120,000 with most of the loans being applied for at 5am in the morning,” Dr Mwangi stated.

The group’s loan portfolio stood at Ksh303 billion in the period under review up from Ksh214 billion recorded in 2014 while total assets grew to Ksh428 billion up from Ksh344 billion recorded same period previous year.

The group however s******d from the currency turmoil that was experienced in 2015 that saw South Sudan devalue its currency by 84 percent while Uganda and Tanzania shillings depreciated by 10 percent and 12 percent respectively.

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