Nairobi; Kenya: Equity Bank Group reported a 25 per cent jump in pretax profits for the first nine months of the year, citing growth in non-interest income and a drop in provisions for bad debts.
The bank, which focuses on the lower-income part of the market, and also operates in Uganda, South Sudan, Tanzania and Rwanda, said profit rose to Sh15.82 billion as non-interest income rose 23 per cent.
“Although these markets are still not competitive, they will contribute more to profitability in the future,” said James Mwangi, Equity Group Chief Executive.
The bank’s agency banking network also maintained its rapid development and now has 15,875 agents representing a 70 per cent Year-on-Year growth. Plans, Mwangi said, are also underway to expand the agency offering to include other services like Insurance and Air Ticket sales, adding, “Agents are now processing more cash withdrawals and deposit transactions than the branches and ATMs combined.” Comparatively, the Group’s revenues drawn from other fees and commissions income at Sh6.5 billion, up from Sh5.1 billion registered within the same period last year, appears to be growing faster than the fees and commissions income on loans and advances, which has been a traditional income driver for commercial banks.
Further confirming the bank’s growing reputation as an economic development financier, Equity Bank’s loan book grew by 30 per cent to Sh206.7 billion up from Sh158.6 billion and was supported by a 27 per cent growth in deposits of Sh243 billion up from Sh192 billion and a 38 per cent growth in long-term debt to Sh34 billion up from Sh24 billion.
The Group is in the process of forming a holding company that will be domiciled in Kenya to have oversight over the other subsidiaries in Uganda, Rwanda, Tanzania and South Sudan, which will also operate and separate units.
“We have already received approvals from Capital Markets Authority and the Central Bank to form Equity Group Holdings Limited.