Equity Bank reported 11% rise in its balance sheet from Kshs 473.7 billion in 2016 to Kshs 524.5 billion in 2017. This according to Mr. James Mwangi is 8.1 times more than the country’s 2017 GDP which was at 65 billion ( 535b divided by 65b =8.1). The increase in the lender’s balance sheet shows how rigid the bank is regardless of the economic condition in the country which saw Kenya’s GDP reduce from 5.8% to 4.8% in 2017.
“Performance kept on improving regardless of the unfavorable difficulties in year 2017. We were rated 37th most solid bank on earth. We were also rated Best Kenyan bank,” says Equity CEO James Mwangi. He also added that the effect of IFRS 9 (International Financial Reporting Standard) is reduction of core capital to risk weighted to 18.7% as opposed to the minimum of 14.7%, took effect as of 1st Jan.
The lender has announced its financial results as at 31st December 2017 indicating an increase of Profit After Tax(PAT) by 14%. The Group’s differentiated leadership, business model and strategy defied a challenging operating environment in 2017 hence reporting an increase in its PAT from 16.6 billion in 2016 to 18.9 billion 2017.
Net loans increased by 5% from KShs 266.1 billion in 2016 to KShs 279.1 billion in 2018. Mr Mwangi linked the 5% loan growth book to the conservative nature of the lender because of micro-enterprises. He said that areas like Gikomba & Kariobangi is where most of the bank’s customers whose risk rate is very high are. The 5% loan growth is composed of major contributions from the manufacturing sector, consumers & SMEs (Small & Medium sized enterprises). The lender is optimistic that the Agricultural sector & ‘The Big Four’ will drive an growth in loan book to 15%.
Staff costs reduced by 1% from 11.6% in 2016 to 11.5% in 2017 due to digitization & reduction of operating expenses. The lender laid off no staffs, as a matter of fact, the lender touts of its high number of employees which currently stands at 680,000.
The lender’s customers grew by 1 million from 11.1 million in 2016 to 12.1 million customers in 2017. The lender registered roughly 100,000 customers every month in year 2017 and which was a similar trend in year 2016 where it also grew its customers with 1 million.
The number of loans on Equitel contributed 70 billion to 7.3 million customers and where high net-worthy individuals & MSMEs(Micro, Small, Medium-sized entreprises) constituted the borrowers.
The lender is optimistic of a 20-25% increase in subsidiaries contributions(assets) which will come from Uganda & DRC.
The Lender’s CEO, James Mwangi did not forget to mention that the Africa Continental Free Trade Area(AFCFTA) is a game-changer which will accelerate industrialization and facilitate joint development of infrastructure.