Zachary Ochuodho @zachuodho
Equity Group Holdings demonstrated its resilience by posting a 22 per cent net profit growth of Sh5.9 billion in its first quarter of the year up from Sh4.9 billion recorded on March 30, last year.
The group recorded improvements in non-funded income streams such as trade finance income, merchant commissions, mobile banking commissions, bond trading income, Swift & RTGS income and Diaspora Remittance. Non-funded income contributed about 41 per cent of the Group’s first quarter total income of Sh16.5 billion.
Equity Group Holdings chief executive James Mwangi said these results reflect momentum initiated in 2017 when the Group registered a 14 per cent net profit growth in a challenging environment where its peers reported negative earnings growth.
“Geographical and business diversification saw the subsidiaries significantly increase their profit contribution from 14 to 19 per cent of the group’s total profit – delivering on the Group’s objective of de-risking concentration,” said Mwangi.
Mwangi said subsidiaries grew their profit contribution by 65 per cent to Sh1.5 billion with Equitel’s profitability growing by 204 per cent and Equity Investment Bank by 481 per cent.
“The South Sudan subsidiaries grew their profits by 291 per cent, Tanzania by 68 per cent, DRC by 78 per cent, Rwanda by 58 per cent and Uganda by 28 per cent,” he said.
He said the enacted of Banking (Amendment) 2016 was a misstep which needs to serve as a lesson to policymakers. Mwangi said the law served the corporate and not the small and medium-sized enterprises who needed it much.
“The focus on the customer to deliver value and convenience attracted a million new clients to reach a customer base of 12.2 million,” he said adding that during the period, customers’ deposits grew by nine per cent to reach Sh382.4 billion up from Sh349.3 billion.
Mwangi said the group’s digitisation and innovation enabled the group’s customers to process 97 per cent of all their transactions outside the high fixed cost brick and mortar branches.
Mobile lending, Mwangi said, saw 92 per cent of all loans processed online, making banking intermediation what you do on devices rather than the place you go to.
Total income grew by nine per cent despite interest rates capping whilst total costs reduced by one per cent and resulted in improvement of the Group’s cost-income ratio to 47.5 per cent from 49.4 per cent the previous year.