Equity Net Profit: Equity Bank has reported a net profit of Sh. 15.8 billion in the third quarter ended September 30, 2018. This was an 8 per cent increase from the Sh. 14.6 billion posted in a similar period last year.
Equity chief executive officer James Mwangi on Monday attributed the increased bottom-line to higher interest income and reduced costs even as subsidiaries increased contribution to net profit from 14 percent to 19 percent.
The lender’s total interest income in the period rose from Sh. 25.2 billion to Sh. 25.8 billion.
Equity Bank increased investment in government securities to Sh. 158.3 billion in Q3 2018 from Sh. 127.7 billion in Q3 2017.
Non-funded income – which includes earnings from foreign exchange trading, mobile banking and diaspora remittances – dropped to Sh. 19.8 billion from Sh. 19.8 billion.
However, total income grew marginally by 1 percent from Sh. 48.7 billion in Q3 2017 to Sh. 49.3 billion in Q3 2018.
Digital payoff
Equity’s digital strategy continued to deliver as 79 per cent of transactions moved to Equitel and the mobile app, leaving branches with only 3 percent.
The rest of the transactions were undertaken by agents and at ATMs.
However, in terms of value of transactions, branches commanded 49 percent down from 51 percent in the third quarter of 2017.
“We are now 13 million customers and we believe the convenience of digital platform is bringing in a phenomenal difference. Fintech innovation and digitization is becoming a net deposit mobilizer,” said Mr Mwangi at the investor briefing this morning as he predicted better results from the region.
“The region is depicting a strong economic outcome of about six per cent. This will support growth in the subsidiaries,” he said.
However, he continued to call for removal of rate cap saying that the recent decision by government to remove the interest floor on deposit offers some reprieve but not enough to stimulate recovery in private sector growth.
