Equity Group has registered a profit after tax of 19.8 billion shillings in its first financial year, a five percent increase from 18.9 billion shillings posted the previous year.
The increase in profit has been attributed to increased lending by the lender to the Government
The bank’s net interest income grew 10 percent to 41.4 billion shillings as it concentrated an increase in yield on loans at 11.7 percent as the yield on government securities went up by 11.4 percent.
The bank’s customer loans increase from 279 billion shillings to 297 billion shillings.
Equity Bank Group Chief Executive James Mwangi disclosed that there was a slight increase on deposits from 373 billion shillings to 422 billion shillings, terming it a vote of confidence in Kenya’s second-largest bank by assets.
“We are progressing well when it comes to our performance year in year out. Interest rates income still remain our stronghold as we have witnessed a 10 percent growth compared to last year from 48.4 billion shillings to 53.2 billion shillings,” added Mwangi.
The group equally shaved it’s operating expenses by 1 percent to close the year at 23.7 billion shillings despite a 6 percent drop on its non-funded income at 25.9 billion shillings.
The group’s cash transactions happening outside the branch stands at 96 percent with 93 percent of loans accessed and originated through mobile transactions.
In the year under review, Equity set aside 3.7 billion shillings in earnings as provisions for bad loans up from 3.4 billion shillings in 2017.
Mwangi said the additional buffers gave the lender much needed a cover over legacy bad debts to allow the bank to take off without worries in 2019.
It was marked by an increase in gross non-performing loans of 24 billion shillings up from 17.9 billion shillings.
Statutory loan reserves declined from 2.6 billion shillings to 16 million shillings.
The lender also faced a challenge making money away from interest with non-funded income declining from 27.5 billion shillings to 25.8 billion shillings on lower fees and commissions and foreign exchange trading.