Kenya's largest retail bank, Equity, has posted an impressive growth of 107 per cent to Sh1 billion in its pre-tax earnings for the half-year period ended June 30. A significant growth in customer base and deposits saw the bank's total operating income increase by 83 per cent to Sh2.6 billion from Sh1.4 billion in a similar period last year.
The bank has seen its customer base rise by 300,000 in the six months since January to 1.3 million customers representing about 35 per cent of all bank accounts held in the 42 licensed banks in the country.
Customer deposits have also soared by Sh7.3 billion to Sh23.6 billion since January. The bank's after tax profits increased by 137 per cent to Sh830 million up from Sh350 million in a similar period last year.
Overhead expenses increased
Equity's Chief Executive Mr James Mwangi said that commission based income remains the bank's core revenue stream since most of the bank's lending was short term and in small amounts.
Net interest income for the period was Sh1.2 billion compared to a total non-interest income of Sh1.3 billion.
Gross loans and advances portfolio grew by 31 per cent to Sh15 billion in the first half of the year, up from Sh8.5 billion in a similar period last year.
Overhead expenses increased by 70 per cent from Sh903 million to Sh1.5 billion as the bank forged ahead with its branch and staff expansion.
The total assets went up by Sh9 billion to Sh29 billion while staff numbers grew by 600 to 1,919 in the period.
Bank won global vision award
Mwangi noted that the bank's cost to income ratio improved from 64.3 per cent to 59.7 per cent and remained below the industry average of 65.4 per cent.
The performance indicates that the bank could well be on its way to hitting the Sh2 billion pre-tax profit mark after returning Sh1.1 billion last year.
Equity Bank recently won the global vision award in microfinance jointly with Grameen Bank of Bangladesh, during the annual G8 summit held last month in Germany.
The bank's shares were priced at between Sh133 and Sh128 in yesterday's trading at the stock market.
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