Equity Bank CEO James Mwangi. Photo/the-star.co.ke
Equity Group Holdings Plc posted a 14% growth in assets to reach Kshs504.9B up from Kshs 444.4B for the period ended 30th June 2017. This was largely driven by growth indeposits which went up by 13% to Kshs.363.6B up from Kshs 320.8B in the same period last year. Thisgrowth comes at a time when the banking industry growth rate has almost flattened out.The Group’s deposit mobilization was boosted by growth in customer numbers which reached 11.7 million, akeen focus in adoption of the alternate delivery channels that include the Eazzy banking suite of products,agency banking model, mobile banking, and internet banking.Equity’s superior performance enabled it to achieve a pre-tax profit of Kshs 13.3B for the period ended 30thJune 2017. This was in part due to increased revenue from non-interest income and growing regional bankingsubsidiaries’ contribution to profits before tax. This saw the Group outperform the industry to register aReturn on Equity of 22.3% and a Return on Asset of 3.8% despite a 12% reduction in interest income.Speaking during the Investor Briefing, Equity Bank CEO, Dr. James Mwangi said "The Group's businesscontinues to demonstrate resilience. 2017 is proving to be an extension of the tough operating environmentwitnessed in 2016 but as a Group we have already developed and adopted a sustainable business model tocushion the business as well as boost value creation for shareholders. Innovation has proved to be a greatenabler in driving growth. We are already registering efficiency gains from digitization.”The Group continued to evolve its business model to weather the interest capping effects by focusing ongrowing the non-funded Income which constitutes 42% of the Group’s total income. This grew from Kshs.10.8B to Kshs. 13B representing a 20% rise from the same period last year. This was mainly driven bymobile banking commissions which grew by 337% to Kshs.649.7M from Kshs 148.8M. Trade Finance grewby 25% to hit Kshs 532.8M from Kshs 426.3M, Merchant commissions grew by 12% to Kshs 579.6M fromKshs 519.4M while Agency revenue grew by 27% to Kshs 424.5M up from Kshs. 333.8M in the same periodlast year.The Group also reaped benefits of regional diversification and saw the regional banking subsidiaries’contribution to the Group’s pre-tax profit double from 5% to 10% with Uganda PBT growth of 139%,Rwanda 75%, Tanzania 55%, and DRC 20%.Through cost optimization the Group continues to transform its cost structure especially on the deliverychannels from fixed to variable cost channels with the bulk of transactions being processed via mobile,agency and merchants’ outlets. This has led to a cost income ratio of 44.5% for Kenya. The Group’s totalcosts reduced to Kshs. 17.6B down from 17.9B for the same period last year. Equitel platform Group'sMVNO banking transactions grew by 42% to 138.7M from 97.8M, Agency banking transactions grew by10% to 33M from 29.9M while merchants transactions grew by 20% to 5.3M from 4.4M for the period underreview showing the customers growing preference of alternate delivery channels.