Equity Bank and Kenya Commercial Bank (KCB) are likely to become the first banks in the country with with Ksh1 trillion balance sheets.
Q3 results released by Equity on Thursday, November 12 saw its balance sheet expand 38% from Ksh677.1 billion to reach Ksh934 billion as of September 30, 2020.
KCB results for the same period, published on November 11, showed a 27 per cent growth in total assets expanding its balance sheet to Ksh972 billion.
Eqiuity’s Pan-African expansion drive, including the acquisition of a majority stake in Banque Commerciale Du Congo in August for $95 million (Ksh10.2 billion), contributed to the gains. Improved performance by regional subsidiaries was also hailed for reducing dependence on Kenya for group performance.
Customer deposits, for example, registered 45% growth from Ksh478 billion to Ksh691 billion driven by 51% growth in Uganda, 21% growth in Kenya and an additional Kshs130 billion from the acquisition of BCDC in DRC.
Regional subsidiaries contributed 40% of customer deposits, 39% of group total assets, 33% of the loan book, 30% of the group’s revenue and 25% of the group’s profit before tax. Profit after tax declined by 14% from Ksh17.5 billion to Kshs15 billion.
Equity Bank Group CEO James Mwangi has long spoken of the organization’s ambition to see a Ksh1 trillion balance sheet.
“It is now clear that the ambition of Equity to reach a trillion shillings balance sheet is in sight…If we miss it this year, it will be narrowly, and it will be accomplished by next year,” he stated in September 2020.
The Q3 results offered several other insights, with Equity’s loan book growing 30% from Kshs 348.9 billion in September 2019 to Kshs 453.9 billion as at 30th September 2020.
“We grew our loan book by 30% year on year in order to support our customers who saw opportunities of green shoots and diversification in the COVID-19 environment.
“Most of the new opportunities we funded were in manufacturing of PPE’s, logistics, online businesses, agro- processing, fast moving consumer goods and agriculture value chains,” Mwangi explained while announcing the results.
KCB, on the other hand, saw customer deposits grow 32 per cent to hit Ksh772.7 billion, with its loan book also growing 19 per cent from Ksh468.4 billion to Ksh577.5 billion.
The bank restructured loans worth Ksh105 billion due to the impact of the Covid-19 pandemic, across sectors including real estate, tourism and hospitality, and manufacturing.
The bank registered a 37 per cent decline in profit before tax which fell to Ksh17.1 billion from Ksh27.2 billion in the same period last year. Profit after tax fell to Ksh10.9 billion from Ksh19.2 billion.