Equity profit leaps by 120pc
By Tom Mogusu
Equity Bank has announced it had more that doubled its profitability during the financial year ended December 31.
The bank registered a record 120 per cent growth in pre-tax profit, from Sh500 million registered in the previous year to Sh1.1 billion.
The bank’s managing director, Mr James Mwangi, told investors on Monday the growth was driven by a significant improvement of the loan book and prudent risk management principles.
He said a strong economic performance and conversion from a building society to bank contributed to the good run. Mwangi said the change of perception by Kenyans to build local brands also supported the performance.
During the period under review, total assets grew by 74 per cent from Sh11.5 billion to hit the Sh20 billion mark, while customer deposits increased by 81 per cent from Sh9 billion to Sh16.3 billion.
"The growth in profitability was also supported by a robust information technology (IT) platform that enabled the bank to open up alternative delivery channels such as Internet and SMS banking."
The bank also chalked up more business after listing at the Nairobi Stock Exchange, a move that increased Equity’s brand visibility.
The customer base increased from 556,000 in 2005 to 1,014,474, while the number of branches increased from 31 to 42.
The bank’s gross loan portfolio increased significantly from Sh5.9 billion to Sh11.4 billion due to increased lending, especially to the agriculture sector and small and micro enterprises.
"Despite the increase in the loan portfolio, the level of non-performing loans relative to the loan portfolio remains quite low owing prompt follow up and recovery," Mwangi said.
The bank’s interest income on loans was up by 117 per cent from Sh692 million to Sh1.5 billion.
The board of directors announced a dividend payout of Sh2 per share, which is 40 per cent of the paid up capital.
Mwangi announced that the bank plans to roll out the second phase of its expansion strategy in key regions in the country.
The bank, he said, will also increase the use of its IT platform to introduce more delivery channels and points of sale.
"We will scale up out out-reach programmes because we are aware that our competitors are also targeting the small and micro segment for growth and that is why they have been opening new branches."
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Tuesday, February 13, 2007
Equity profit leaps by 120pc