Equity Bank first quarter profit up 21 per cent

By JAMES ANYANZWA and LILLIAN KIARIE

Nairobi,Kenya:The performance defied   a challenging business environment, marked by uncertainty of recent General Elections

Equity Bank registered a 21.6 per cent growth in profit during the first three months of this year.

The group’s profit before tax rose to Sh4.5 billion for the first quarter of 2013 from Sh3.7 billion in a similar period last year.

Managing Director and Chief Executive James Mwangi attributed the performance to growth in the private sector credit and reduction in the cost of funds.

Other factors were the relatively cheaper long-term debt from the international markets and improved efficiency in the processing of transactions. However, even as the group raked in 800 million in earnings the institution suffered a slump in the volume of business transactions.

Mwangi noted that the period under review was indeed a  ‘difficult’ one. He said many businesses deferred investment decisions while households and the March 4 general elections and the subsequent Supreme Court ruling carried individuals away.

“ Transactions have slumped. We were going through a very difficult period,” Mwangi told an investor briefing in Nairobi yesterday.

Consequently, the bank’s total branch transactions dropped to two million from 2.4 million while ATM transactions fell to 2.8 million from three million transactions in a similar period. However, transactions from Agency banking, touted as the bank’s key growth driver, grew to 2.2 million from 1.4 million transactions.

Total income went up 13 per cent to Sh10.2 billion from Sh9 billion while operating costs increased 10 per cent to Sh5 billion from Sh4.5 billion in a similar period.

Interest income advanced 9 per cent to Sh7.9 billion from Sh7.3 billion.