Customer base grew to 13.5 million from 12.1 million in 2017
Equity Group Holdings (Plc) has reported a Ksh19.8 billion (US$196 million) net profit for the year ended December 31, 2018, up from Ksh18.9 billion (US$187.9 million ) recorded a year earlier(2017).
The 4.8 per cent jump in net earnings came as the regional lender reaped from its continued investment in financial technology.
Group Managing Director and CEO James Mwangi has also pegged the performance to “increased focus on non-funded income”, which includes continued adoption of digital banking systems.
This came as outside branch transactions accounted for 96 per cent of the bank’s total transactions.
Mobile transactions, Equitel and the bank’s App accounted for 77 per cent of the transactions up from 72 per cent the previous year.
During the period under review, ATM transactions reduced to four per cent compared to five per cent the previous year, while agency activities dropped to account for 12 per cent of the transactions compared to 15 per cent in 2017.
Braches accounted for four per cent of the transactions compared to five per cent in 2017, signaling brick and motar is becoming less important to customers as time goes by.
“Focused and sustained investment in fintech innovation and digitization has resulted in operational efficiencies, cost optimizations, customer convenience and ease of access and use of the bank’s offering, as well as positioned Group’s speed to market with emerging opportunities,” Mwangi said.
During the year, the bank recorded a 13.3 per cent increase in customer deposits which closed at Ksh422.8 billion (US$4.2 billion). This was up from Ksh373.1 billion (US$3.7 billion) it handled in 2017.
The bank’s loan book remained unchanged at Ksh297 billion (loans and advances to customers) reflecting reduced lending activities to individuals by lenders in the interest rate capping environment.
Interest income from loans and advances however closed at Ksh36.4 billion, a slight growth from Ksh33.9 billion the previous year while that from government securities rose to Ksh16.3 billion compared to Ksh13.4 billion.
Total interest income closed 9.9 per cent higher at Ksh53.2 billion compared to Ksh48.4 billion the previous year.
The regional lender’s total operating income closed the year at Ksh67.3 billion up from Ksh65.2 billion.
Operating expense stood at Ksh38.8 billion as staff costs consumed Ksh11.5 billion.
The group grew its assets to a tune of Ksh573.4 billion, a 9.3 per cent from Ksh524.5 billion in 2017, as investment in securities went up 25.7 per cent to Ksh160.9 billion from Ksh128 billion.
Last year, Equity Groups total Non-Performing-Loans (NPLs) increased to Ksh21.1 billion from Ksh15.4 billion a year earlier.
Insider loans and advances went up to Ksh9.3 billion from Ksh8.9 billion with staff taking up the bigger chunk of Ksh6.2 billion, as directors, shareholders and associates took Ksh3.2 billion. Lending to staff was Ksh5.7 billion in 2017.
The Nairobi Securities Exchange (NSE) listed lender has its main operations in Kenya with subsidiaries in Uganda, South Sudan, Rwanda and Tanzania.
The bank has noted growth in merchant banking and diaspora remittances on digitization activities.