Equity Bank

Equity bank – Kenya’s largest bank by customer base has posted a 14% jump in net profit; from Ksh 19.8 Billion in 2018 to Ksh 22.6 billion for the year ended 31st December 2019.

The growth was underpinned by a 23% growth in its loan book to Ksh 366.4 billion up from Ksh 297.2 billion during a similar period in 2018.

Customer deposits and shareholder funds grew by 14% and 18% respectively, but it is a 26% growth in long term borrowed funds that saw Equity’s balance sheet hit Ksh 673.7 Billion.

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A 52.1% liquidity on the balance sheet now means that the lender has about Ksh 350 billion in liquid cash.

Equity’s boss Dr. James Mwangi said that the lender’s continued quest to expand beyond Kenyan borders has seen subsidiaries contribute 18% of the net profits compared to 15% in 2018.  

Currently, Equity bank operates in seven countries with Ethiopia being its latest addition. The subsidiaries now account for 27% of the Groups’ total assets.

During the same period, Equity Bank observed that 97 percent of all its transactions happened outside the branch, with mobile platforms scooping the lions share. Up to 93% of all its loans were disbursed via mobile channels.

These statistics mirror a growing acceptance of digital money globally let alone Kenya. As of 2018, 92 percent of all global cash reserves were held digitally.

Its buffet of virtual banking applications, use of third-party infrastructure and self-service platforms have transformed Equity’s banking model – from a place you go to something you do on your devices.

The bank maintained a healthy mix of asset classes although Small and Medium Enterprises made up a good chunk of the bank’s entire portfolio at 59%. But despite pressure on the asset quality, Non-Performing Loans (NPLs) stood at 9% against an industry average of 12.1 %.

Return on equities improved to 21.8% up from 21.1% in 2018 against a group cost of capital of 18.7%. With a 14% growth in earnings per share (Ksh 5.93 up from Ksh 5.22) the board of directors has proposed a final dividend payout of Ksh 2.50 up from Ksh 2.00 in 2018.

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