Equity Group this morning reported an 8% growth in Profit After Tax for the third quarter to September 2018 to reach Ksh 15.8bn up from Ksh 14.6bn in 2017.
The Group now has a liquidity ratio of 55%, non-funded income contributes 40%, subsidiaries contribute 18% of earnings and costs have declined by 4% over the past 1 year. Key in management strategy has been innovation and digitization of the Group which is now being rolled out to the subsidiaries, consolidating efficiency gains.
Equity Group also reported differentiated revenue growth of 1% to Ksh 49.3bn up from Ksh 48.7bn. Non-funded income held strong to reach Ksh.19.8bn driven mainly by remittance commissions, trade finance, agency and credit card fees and commissions.
Equity Group has today announced an 8% growth in profit after tax for the third quarter September 2018 to reach Ksh. 15.8 billion up from Ksh. 14.6 billion in 2017. pic.twitter.com/M6g2TzzJPt
— Equity Bank Kenya (@KeEquityBank) November 5, 2018
In the year, the Group’s execution of the 3.0 Strategy of digitization through its digital suite of self-service tools known as Eazzy Banking continued to pay off. Third-party channels reported an exponential growth of customer activity, contributing over 97% of transaction volume. Eazzy Banking App grew by 208% to 168 million transactions from 55 million YoY and a value of Ksh 89bn from Ksh 52bn YoY.
Eazzy Biz, which is a cash management solution for SMEs had a rapid adoption in the market that resulted in a growth of 148% YoY with a transaction value of Ksh 187.3bn from 90.9bn YoY.
The strategy of re-inventing the branches as relationship and wealth creation centres for our SMEs, corporates and high net worth individuals saw transaction value grow to Ksh 11.07bn from Ksh 11.06bn YoY, while transaction volumes declined from Ksh 14.4 million to Ksh 13.5 million as customers preferred to transact on the self-service channels.
Equitel’s transaction value grew by 20% to Ksh 425.1bn up from Ksh 353.6bn despite a slight decline in transaction volumes to 185.4 million from 197.1 million YoY.
The agency network which has now grown to reach over 30,000 agents saw the transaction volume grow by 7% to 53.4 million from Ksh 49.8 million with value growing by 17% to Ksh 459.7bn from Ksh 391.3bn.
Diaspora remittances grew by 282% to Ksh 57bn from Ksh 15bn YoY due to increased strategic partnership with payment partners including PayPal, Equity Direct, Western Union, MoneyGram, Wave and Swift.
The Group’s 3.0 Strategy and differentiated business model saw total costs decline by 4% to Ksh 26.9bn from Ksh 28.0bn reflecting the consolidation of efficiency gains of innovation and digitization of business. Profit Before Tax grew by 8% to Ksh 22.4bn up from Ksh 20.7bn.
Total assets grew by 8% to Ksh 560.4bn up from Ksh 518.2bn YoY with net loans growing by 9% to Ksh 288.4bn up from Ksh 265.4bn while government securities grew by 24% to Ksh 159bn up from Ksh 128bn YoY.
“While the agile and liquid balance sheet positioned the Group defensively in the past, it now positions the Group competitively to take advantage of emerging opportunities at lower operational costs,” Dr. Mwangi commented.
The focus by the Group on the quality of the loan book saw Non-Performing Loans (NPLs) as at the end of the year close at 8.7% compared to 12.7% for the banking sector.
Deposits grew by 9% to Ksh 402.2bn from Ksh 368.8bn as the number of customers reached 12.7 million.
The Group has continued to invest in social impact investments. To date Equity Bank has trained close to 1.66 million entrepreneurs including farmers, women, youth groups, and micro-, small- and medium-sized enterprises through various initiatives led by Equity Group in partnership with Mastercard Foundation and the International Labor Organization. 39,070 entrepreneurs have received a three-year entrepreneurship training and 600,000 small scale peasant farmers have transformed into agribusiness through training while 2,616 medium scale farmers are being supported to transform through value addition.