Did you know that after resigning, the former Nairobi County Deputy Governor Polycarp Igathe joined Equity Group Holdings limited as chief commercial officer? His appointment in May this year has bore a very great profit to the group. Nairobi County will have to miss his services. Do you know why?
Under a challenging operating environment, the Equity Group business model enabled it to report 8% growth in Profit After Tax for the third quarter to September 2018 to reach Ksh 15.8bn up from Ksh 14.6bn in 2017.
Profit before tax has grown from Kshs 20.7 Billion to Kshs 22.4 Billion registering a growth of 8% while Profit after Tax grew by 8% from Kshs 14.6 Billion to Kshs 15.8 Billion #EquityQ3Results
— Equity Bank Kenya (@KeEquityBank) November 5, 2018
The operating environment in the last nine months was characterized by volatility in the business environment resulting in elevated
inflation, continued interest rate capping causing a credit crunch, and a lowered Central Bank Rate which dipped the yield on
loans.
A fortified liquid and agile balance sheet positioned the Group competitively in the uncertain operating environment while diversified
revenue streams, geographic expansion and structural efficiency gains enabled the Group to weather the effects of interest rates
capping.
The Group now has a liquidity ratio of 55%, non-funded income contributes 40%, subsidiaries contribute 18% of earnings
and costs have declined by 4% over the past 1 year.
Key in management strategy has been innovation and digitization of the Group which is now being rolled out to the subsidiaries, consolidating efficiency gains. Equity Group has reported differentiated revenue growth of 1% to Ksh 49.3bn up from Ksh 48.7bn, despite the impact interest
rates cap and the challenging operating environment have had on the banking sector.
Non-funded income held strong to reach Ksh.19.8bn driven mainly by remittance commissions, trade finance, agency and credit card fees and commissions
CEO James Mwangi attributed the growth to higher interest income and reduced costs.
He addressed stakeholders during the release of the results on Monday.
However, Mwangi noted a significant decrease in branch transactions. He Said the centres are now largely used for SMEs focusing on building relationships with SMEs.
This has seen banks handling on three per cent of transactions as 79 per cent of transactions moved to Equitel and mobile apps. The remaining transactions were done through agents.
“Equity Group business model has proven that the Group is not dependent only on the loan book income to drive shareholder value,” Equity Group Managing Director and CEO Dr. James Mwangi said and added: “We are reaping the benefits of a strong social brand that focuses on enhancing our relationship with the community through a shared prosperity approach to business.
Return on Equity for the Group has grown from 22.7% to 23.0% and return on Assets is at 3.9% #EquityQ3Results
— Equity Bank Kenya (@KeEquityBank) November 5, 2018
This, coupled with a staff force that is talented, passionate and committed to our shared vision of transforming the lives and livelihoods of our people gave the Group a strong foundation to confront and defy a perfect storm.”
In the year, the Group’s execution of the 3.0 Strategy of digitization through its digital suite of self-service tools known as Eazzy Banking continued to pay off.
Third-party channels reported an exponential growth of customer activity, contributing over 97% of transaction volume. Eazzy Banking App grew by 208% to 168 million transactions from 55 million YoY and a value of Ksh 89bn from Ksh 52bn YoY.
Eazzy Biz, which is a cash management solution for SMEs had a rapid adoption in the market that resulted in a growth of 148% YoY with a transaction value of Ksh 187.3bn from 90.9bn YoY. Don’t you think that Igathe has greatly contributed to this?
EazzyBiz (Cash and Liquidity Management System for SMEs and Corporates ) has also played a key role with its transactions growing to 1.2 million transactions with a value of Kshs 187.3 billion. #EquityQ3Results
— Equity Bank Kenya (@KeEquityBank) November 5, 2018