The sports category has moved to a new website.

Equity Bank nets Sh15 billion profit from increased interest income

Interest income, increased deposits and a successful strategy in the mobile money market are the key areas that have held the bank at a time when the industry faces turbulence.

___5706011___https:______static.pulse.com.gh___webservice___escenic___binary___5706011___2016___11___4___8___equitybank3

Equity bank has announced an after-tax profit of Sh15.1 billion Kenyan shillings in this year’s third quarter financial results. This is an 18 per cent increase from the same period in September last year where the profit stood at Sh12.8 billion.

Several factors have been behind the growth as the second-tier bank continued its steady growth in assets and profits over the last three years.

Interest income grew by 26 per cent to Sh39.8billion. There was however a decrease in loans to the private sector forcing the bank to increase its government securities stock.

Equity CEO Dr. James Mwangi explained the slump in private sector loans to the recent capped interest rates.

ADVERTISEMENT

“The debate on capping of interest rates started late last year and the public took a wait and see approach”, he said.

The total deposits for the Equity Bank Group grew from Sh317billion in September last year to Sh331 billion this year which helped push the group’s total asset base from Sh445 billion in September last year to Sh468 billion this year.

The real success story for the group this year has been the performance of Equitel, their mobile platform.

Equitel moved Sh139billion via mobile money between April and June 2016, moving to 2nd position in the market.

Loans disbursed through Equitel as at end of September 2016 stood at 4.5million against a count of 846,000 loans disbursed through the branch. Loans on Equitel moved from Sh 1.6bn in Sept 2015 to Sh30bn in September 2016.

ADVERTISEMENT

Their newly launched app Eazzy pay is expected to complement Equitel as the bank pushes for a higher share in the mobile money market which Equitel currently holds a 15% share.

“Customers have declared the death of the branch as a transaction channel,” said Dr. Mwangi. However, the digitization process has also spelt the death of hundreds of jobs at the bank.

While releasing the results, the Equity Bank CEO announced the loss of 400 jobs through what he called “natural attrition”.

Equity bank currently has a program that allows for voluntary exits of its employees as it works to trim its workforce. Last year through the same plan the bank shed 600 of its staff.

It has also frozen staff recruitment enabling it to maintain a flat staff costs despite a 20 per cent increment of the remaining staff salary.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: news@pulselive.co.ke

Recommended articles

Whole stuffed chicken recipe you can make for Easter

Whole stuffed chicken recipe you can make for Easter

Understanding delay rings, how they work & safety measures when using them

Understanding delay rings, how they work & safety measures when using them

Ex-cop Linda Okello acquires 2nd lavish home in the U.S.

Ex-cop Linda Okello acquires 2nd lavish home in the U.S.

10 essential parenting tips all first-time fathers should know

10 essential parenting tips all first-time fathers should know

15 Foods That Help Improve Erections

15 Foods That Help Improve Erections

10 unique ideas to gifting car enthusiasts on their special days

10 unique ideas to gifting car enthusiasts on their special days

10 important things to consider before getting a fire extinguisher

10 important things to consider before getting a fire extinguisher

Here's why dates begin Iftar meals during Ramadhan

Here's why dates begin Iftar meals during Ramadhan

Largest frog in more than 100 years discovered in Africa

Largest frog in more than 100 years discovered in Africa

ADVERTISEMENT