With a balance sheet worth Tshs 14.3tr at the end of 2019, Equity Bank has been listed seven among the top 10 banks in Africa for 2020. Rightly so because, according to The Banker’s Top 100 African Banks ranking for 2020, Equity Bank has scored 5.82 in the overall category of the best performing banks.
Equity Group has an asset base of US$9bl and with over 14.2 million customers; the Group is one of the biggest by customer base in the region. It has a footprint of 300 branches, 51,560 agents, 31,265 merchants and 623 ATMs and is the largest bank in market capitalization across East and Central Africa.
The Group, which is listed at the Nairobi Securities Exchange, Uganda Securities Exchange, and the Rwanda Stock Exchange, has banking subsidiaries across the region, including Rwanda, Uganda, South Sudan, Tanzania and the DRC.
It also has a Commercial Representative Office in Ethiopia with additional non-banking subsidiaries engaged in the provision of investment banking, custodial, insurance agency, philanthropy, consulting, and infrastructure services.
Officials from the bank are elated about the performance and the recognition they have received. In a press statement the bank’s management said; “This year’s ranking shows stabilisation in the finances of the majority of African major lenders.”
The ranking, which tracks the health and wealth of the African banking sector, uses an array of metrics including the overall growth performance, financial soundness, profits on capital, leverage and return on risk.
“Innovation has also been a great enabler in driving growth and is already registering efficiency gains from digitization,” commented Dr. James Mwangi, Managing Director and CEO said in a press statement.
“The enhanced efficiency and cost optimization saw cost-income ratio improving to 51% from 52.4%,” he added.
Equity Group’s assets now hit a record Ksh581bl
In the year under review, Equity Bank improved on its performance with a 14% profit after tax. The impressive performance registered during an interest capping period was driven by a 23% growth in loan book in 2018.
Equity also improved on its performance with a 14% profit after tax growth. The Group has maintained its yield on interest-earning assets at 11.2% despite the challenge of interest capping and declining yield curve.
On financial soundness, Equity ranked number five on the backdrop of an agile balance sheet with a liquidity of 52.1%, a loan deposit ratio of 75.9% and a core capital to risk-weighted asset ratio of 19.8%. The balance sheet reflects solid diversified funding with customer deposits constituting 72% of the total funding, shareholders and long-term borrowing contributing 17% and 8% respectively.
The financial soundness is further enhanced by a strong capital base, which is well within both internal and regulatory limits, solid business performance and net loans which constituted 54% of the total assets while government securities and cash and cash equivalents contributed 26% and 13% of the total asset allocation respectively.
“The ranking is an indication that Equity remains robust, despite the challenging operating environment. We have developed and adopted a sustainable business model to cushion the business as well as boost value creation for shareholders,” Dr. Mwangi said.
Equity Bank ranked 754 in balance sheet size overall in its global ranking, 62nd in soundness (Capital Assets to Assets ratio), 55th in terms of Profits on Capital and 20th on Return on Assets.
In the same year, Moody’s gave the Bank a global rating of B2 with a negative outlook as the sovereign rating of the Kenyan government due to the Bank’s strong brand recognition, solid liquidity buffers and resilient funding profile, established domestic franchise and extensive adoption of digital and alternative distribution channels. Equity Group Holdings Plc is regulated by the Central Bank of Kenya.