Equity Bank nine-month profit up 10pc to Sh17 billion

Mekatilili · 2019-11-13T12:46:22+00:00

Equity Bank posted a 10.3 per cent jump in net profit in the nine months ended September, helped by increased lending and fees on transactions. The lender’s net profit in the period stood at Sh17.46 billion compared to Sh15.83 billion a year earlier. The earnings were boosted by its subsidiaries in Uganda, Democratic Republic of Congo, and Rwanda whose combined net profit of Sh3.1 billion represented an 18 per cent increase from the year before. The performance came as the bank’s total loan book expanded to Sh348.9 billion in September, up from Sh288.4 billion the previous September. Equity’s larger loan book saw its total interest income rise 11 per cent to Sh42.79 billion in the nine months to September. Its interest expenses rose faster than interest income at 17 per cent to Sh10.5 billion, thinning its net interest margins. Its operating expenses, including staff costs, also rose 12 per cent to Sh30 billion. The bank, which says it now has 13.8 million customers who could increase to 14.6 million based on projected expansion in DRC, Rwanda and Tanzania, saw earnings from fees, commissions and dividends rise 14 per cent to Sh22.54 billion. “The faster growth in total income above net interest income reflects success of the strategic pursuit of the group to grow quality income through non funded income growth,” the lender’s CEO James Mwangi said. Mr Mwangi who had earlier called for total scrapping of interest rate controls, said Tuesday at an investor briefing “it is too early” for the lender to project how interest rates would play out for its new loans in a post rate cap environment. KCB chief executive Joshua Oigara said earlier high-risk borrowers like individuals and small businesses face an increase in loan rates of up to three percentage points following the removal of the legal cap on commercial lending charges. Mr Oigara, the head of Kenya’s largest bank by asset size—said on November 7, removal of the cap will ease lending to the small businesses, but forecast that their interest rate will increase to between 15 percent and 16 percent, up from the current 13 percent. In the amendments to the rate cap legislation, legislators shielded existing loans from higher interest rates once the cap is repealed, meaning that only new loans will be affected by the high interest rates set to follow. President Uhuru Kenyatta’s bid to remove a cap on commercial lending rates was passed in Parliament early this month potentially boosting the flow of credit to the economy and return of expensive credit. Source: Business Daily Africa

Thread starter Mekatilili
Start date Nov 13, 2019

Mekatilili

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Equity Bank nine-month profit up 10pc to Sh17 billion

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