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Equity Bank headquarters in Upper Hill, Nairobi. [File, Standard]

Equity Group registered a net profit of Sh22.6 billion for the year ended December 31, 2019.

This is a 14 per cent increase from Sh19.8 billion that the company recorded in 2018.

The performance was supported by a 23 per cent growth in loan book, from Sh297.2 billion to Sh366.4 billion registered in 2018.

The lender’s growth of 14 per cent in customer deposits, shareholders’ funds of 18 per cent and a 26 per cent growth of long-term borrowed funds led to a 17 per cent increase in the value of total assets.

SEE ALSO: Equity pulls the plug on plan to buy Atlas Mara

This was from Sh573.4 billion in 2018 to Sh673.7 billion last year.

“Execution of the group’s business strategy continued to yield results as non-funded income contributed 40 per cent of the total income reflecting quality and diversification of income,” said Group Chief Executive James Mwangi in a statement yesterday.

“Success in our regional expansion and business diversification saw subsidiaries contribution to group profit after tax rise to 18 per cent up from 15 per cent the previous year.”

Further, Equity’s subsidiaries’ assets accounted for 27 per cent of the group’s total assets.

The subsidiaries profit after-tax contribution grew to 18 per cent of the group’s profits, an increase of four per cent from 14 per cent in 2018.

SEE ALSO: Equity ends proposed acquisition of Atlas Mara

The lender said improved efficiencies at the subsidiaries also ensured that their cost structure contribution to the group improved by two per cent, from 35 per cent in 2018 to 37 per cent.

Digital services continued to thrive as mobile loans dominated the borrowing systems.

“The business model continues to evolve from a fixed to viable cost business model leveraging off variable cost third party infrastructure, principally mobile, internet, agency and merchant banking,” Equity said.

The lender noted that 97 per cent of all transactions happen outside the branch while 93 per cent of all loan transactions are via the mobile channel.

The group also recorded improved efficiency and cost optimisation with the cost-income ratio improving to 51 per cent from 52.4 per cent in 2018.

SEE ALSO: I&M Holdings, Co-op top bank rating for first quarter 2020 – Cytonn research

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