Nairobi, Kenya
Equity Bank profit after tax for the six months to June 30, 2013, grew 17 percent to Ksh6.31 billion from Ksh5.40 billion posted the same period last year. This is despite a depressed economic environment around elections, suspended oil trade in South Sudan and budgetary support challenges in Uganda and Rwanda in the earlier part of the period.
The bank posted a profit before tax of Ksh8.95 billion, up from Ksh7.62 Billion posted during a similar trading period in 2012. Group CEO and Managing Director Dr. James Mwangi said the bank will benefit from an improved economic environment and plans to continue focusing on innovation and technology, new market segments, consolidation of regional businesses and growing the networks and channels to sustain growth in the second half of the year.
“An improved trading environment, diversification of the bank’s portfolio along with strategic global and local partnerships, regional expansion and increase in the number of Equity Bank agents will drive growth and deepen the bank’s penetration into the market,” Dr. Mwangi said.
Equity Bank’s reduction of interest rates from 25% to 18% appears to have paid off, resulting in the growth of its loan book by Kshs11 billion to Kshs150 billion from Kshs 139 billion in the first quarter 2013, or an improvement of 21%. The massive reduction in interest rates increased the customers’ ability to service their loans. This resulted in improvement in the quality of the loan book, holding NPL ratios stable compared to the first quarter 2013.
The growth in the loan book compensated for the reduced interest rate resulting in a minimal reduction in interest income contribution to the total income by 3% from 67% to 64% quarter on quarter. Equity Bank’s total assets grew by 19 percent during the period to close at Kshs 261.60 billion in June 2013 compared with Kshs 219.89 Billion as at 30th June 2012.
The bank’s long term borrowings increased by 13 percent to Kshs 25.6 Billion up from Kshs 22.7 Billion on the back of an enhanced global rating for the bank.Total income grew by 15 percent to Ksh 20.24 Billion from Ksh 17.56 Billion, posted during a similar period in 2012 while total operating expenses rose to Ksh 11.39 Billion from Ksh 10.00 Billion for the period under review, a 14 percent
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