Equity Bank has been ranked as the most attractive bank for investment as per the Cytonn 2016 Banking Sector report. Cytonn’s Chief Investment Officer Elizabeth Nkukuu attributed the growth of Equity to continued investment in the innovative new channels of agency and mobile banking, diversification and regional expansion, including the acquisition of Pro-Credit and improved asset quality.
Ms Nkukuu said the growth in Kenya’s banking sector can be attributed to the sectors ability to develop products that respond to the needs of Kenyans. She added that Equity’s nearly a half a trillion balance sheet was also driven by a 30 per cent growth in customer deposits to Ksh317 billion up from Ksh243.1 billion registered during the same period the previous year.
Equity Bank beat KCB Group and Cooperative Bank that came second and third respectively. “Supported by the increased deposits and a focus on the Small Micro Enterprises(SME) lending, the group’s loan book registered a 27 per cent growth to Ksh263 billion up from Ksh206.7 billion in the previous year, with SME segment contributing 70.6 per cent of the total loan book,” added Nkukuu.
She further observed that high quality loan book has been maintained with non-performing loans outstanding at 4.4 per cent and coverage increasing to 89 per cent as a result of enhanced provisions, which grew by 89 per cent from Ksh900 million to Ksh1.7 billion in response to the rising interest rates.
She also acknowledged the group’s confidence in the growth of customer numbers which was driven by the banks’ ability to offer inclusive banking, facilitated by easy accessibility, convenience and affordability as a result of getting scale on the innovative delivery channel of mobile and agency banking.
Cytonn’s Investment Manager Maurice Oduor said Equitel mobile channel uptake has soared up with 162 per cent growth over the last months, and the number of customers subscribed to the new SIM card banking platform increasing significantly to reach 1.6 million after the launch in mid-August last year.
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