Disrupting the business model, re-imagining the distribution channels, digitization, re-positioning the balance sheet and massive social impact investment in the Equity brand has strategically and uniquely differentiated Equity Group making banking easier and growing profit.
The implementation of Equity 3.0 innovative business strategy, pegged on digitization and virtualization, disruption of delivery channels, transforming the business model and redefining customer’s experience delivered positively affected the financial statement of the banker.
In the Global ranking of the world’s top 1000 banks, Equity Group was ranked as the 16th Best Bank in the world on return on assets, 32nd Best Bank in return on capital, 75th best on soundness measured on capital asset ratio, 844th largest bank in the world and the fastest-growing large bank in Africa.
“Our customer-centric and ecosystem approach to intermediation has given us an opportunity to target our customer’s horizontal and vertical value chains. The branch is evolving to an SME advisory center as the majority of our customers move to more convenient self-service digital channels,” said Equity Group CEO James Mwangi.
The Group registered an 18% growth in total assets to reach Kshs.638.7 billion up from Kshs.542.02 billion registered the same period the previous year. Interest earning assets grew by 15% to Kshs.500.5 billion up from Kshs.433.9 billion driven by a 17% growth in net loan book to Ksh. 320.9 billion up from Ksh.275 billion and a 13% growth in government securities to Kshs.179.6 billion up from Ksh. 158.9 billion.
Profit Before Tax grew by 10% to reach Kshs.17.0 billion up from Kshs.15.5 billion while Profit After Tax increased by 9% to reach Kshs.12 billion up from Kshs.11 billion. The stability in profit contribution was mainly by the Kenya subsidiary at 82% of Group profits was driven by an improved cost-income ratio that declined from 45.6% to 44.9%.
While the regional subsidiaries contribution to the Group profits remained at 18%, they increased their total Group asset contribution to 27% up from 26% and their total Group deposits contribution to 26% up from 25%. The stability in profit contribution by the Kenya subsidiary at 82% of Group profits was driven by the improved cost-income ratio that declined from 45.6% to 44.9%.
Total income grew by 10% to Kshs.36.0 billion up from Kshs. 32.7 billion driven by growth in Treasury income of 12% from Kshs 10.3 billion to Kshs 11.5 billion. Interest income grew by 9% to Kshs.27.7 billion up from Kshs. 25.4 billion while non-funded income registered a 13% growth to reach Kshs.14.9 billion up from Kshs.13.1 billion. Non-funded income contribution to Total Income was 41.4% up from 40.2% recorded the previous year driven mainly by a 20% growth in Merchant commissions from Kshs 876 million to Kshs 1.055 billion, Swift and RTGS commissions which grew from Kshs. 358 million to Kshs. 413 million, a growth of 15%. Diaspora remittance volumes grew by 28% from Kshs 52.1 billion to Kshs 66.5 billion, resulting in Forex trading income growing by 27% to Kshs.1.9 billion up from Kshs.1.5 billion.
Total liabilities grew by 18% to reach Kshs. 535.9 billion driven by a growth of 16% in customer deposits from Kshs.393.7 billion to Kshs. 458.6 billion. The Group has cost-effective funding comprising of 72% customer deposits, 17% shareholders’ funds and 9% long-term borrowings.
In delivering the government big 4 Agenda, Equity Bank is well-positioned as it has repositioned its balance sheet by increasing its liquidity to 61% through a 79% growth in investment in government securities.