10 Key Highlights From Equity Bank’s Financial Results

By Soko Directory Team / Published November 9, 2021 | 10:43 am




KEY POINTS

Equity Bank’s profits were up by 79 percent to 26.9 billion shillings. This was growth from 15 billion shillings at the same time in 2020 helped by rising interest income and falling provisions for bad loans.


Money Market Funds

Equity Group has posted impressive financial results for the third quarter of 2021 despite the ongoing Covid-19 pandemic that has hit hard on various businesses within and without Kenya.

Here are the 10 key highlights and why you should not bet against them:

The Profits

Equity Bank’s profits were up by 79 percent to 26.9 billion shillings. This was growth from 15 billion shillings at the same time in 2020 helped by rising interest income and falling provisions for bad loans.

Non-funded Income

Non-funded income shows how a bank is utilizing its digital channels and flexible cost channels outside the branches such as point of sales machines, cards, and agency banking.

For Equity Group, the non-funded income grew by an impressive 29 percent to 31.4 billion shillings from 24.3 billion shillings as compared to the first nine months of 2020.

E-Commerce

E-Commerce revenue stood at 935 million shillings. In August 2020, the bank’s Payments Directorate set up an e-commerce Payments Unit focusing on Online Acquiring, API Monetization, and Marketplace business as channels for facilitating payments within the e-commerce ecosystems.

In the second half of 2020, the Bank onboarded some of the largest Fintechs in Africa such as Flutterwave to digitize Uber Driver’s daily cash collections, in addition to online acquiring. Others were Cellulant, Payfer, and Multigate.

Revenue

Total payments revenues grew by 37 percent to stand at 7.4 billion shillings from 5.4 billion shillings in the first nine months of 2020.

Payments are in the velocity pillar of financial services with great upside potential as more businesses and individuals embrace cashless payments.

Diaspora Remittances

Diaspora remittances grew by 22 percent to 257 billion shillings while commissions were flat at 1.2 billion shillings.

The bank’s payment partners include Paypal, WorldRemit, Wave, Western Union, HomeSend, TerraPay, SmallWorld, Thunes, Hellopaisa among others, giving their customers freedom of choice.

FX Trading

The bank continued to tick all the right boxes as FX Trading ballooned by 56 percent to 6.2 billion shillings driven by diaspora remittances which contributed to the 28 percent of the 6.2 billion shillings.

Bonds

Bonds trading stood at 2.6 billion shillings from 2.2 billion shillings in the previous year. At the same time, the total assets for Equity Group are now at 1.18 trillion shillings. The lender plans to grow the assets to 3 trillion shillings in the next 5 years.

Cost to Income Ratio

The group’s cost to income ratio was 54.9 percent while that of Equity Bank Kenya was 42 percent showing how Equity Bank Kenya is benefitting from the fruits of digital transformation.

Subsidiaries

“Our largest subsidiary, Kenya, has the highest return on Assets and hence able to lift the Group as we continue to support the subsidiaries on this front,” said Equity Bank.

Regional subsidiaries grew their Group contribution to deposits to 42 percent up from 40 percent, revenue to 37 percent up from 30 percent, and profit before tax and provisions to 26 percent up from 21 percent.

EquityBCDC made a profit after tax of 2.2 billion shillings to become the most profitable subsidiary ahead of Equity Bank Uganda which made a net income of 2.1 billion shillings. Equity Bank Rwanda came third with a net profit of 1.2 billion shillings.

Insurance

Equity Insurance agency which leads the bank’s bancassurance efforts made a profit after tax of 400 million shillings in nine months.

This article is courtesy of a Twitter Thread by Abojani Investment.





About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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