Equity Group Holdings culture of serial innovation, strong execution and customer
centricity that constantly results in review of business model has continued to deliver a strong operating performance.
The Group reported a 22% growth in profit after tax of Kshs.5.9 billion up from Kshs.4.9 billion the previous year. The 22% profit after tax growth reaffirms a differentiated strategy and business model, and strong execution leadership. These results reflect an acceleration in the momentum demonstrated in 2017 when the Group registered 14% profit after tax growth in a challenging environment where its peers reported negative earnings
The Group’s new business model which focuses on customer centricity to deliver value and convenience, attracted a
million new clients to reach a customer base of 12.2 million.
- Customers’ deposits grew by 9% to reach Kshs.382.4 billion up from Kshs.349.3billion, boosting the balance sheet to top half a trillion shillings.
- Non-funded income contributed 41% of the Group’s first quarter total income of Kshs.16.5 billion.
- Non-funded income also saw streams of trade finance income grow
by 32%, merchant commissions by 23%, mobile banking commissions by 75%, Bond trading income by 152%, Swift &
RTGS income by 45% and Diaspora Remittances by 183%.
- Geographical and business diversification saw the subsidiaries significantly increase their profit contribution from 14% to 19% of the Group’s total profit, delivering on
the Group’s objective of de-risking concentration.
- Sustained execution of the new business model resulted in
subsidiaries growing their profit contribution by 65% to Kshs.1.5 billion with Equitel’s profitability growing by 204%, Equity Bank South Sudan by 291%, Equity Investment Bank by 481%, Tanzania by 68%, DRC by 78%, Rwanda by 58% and Uganda by 28%.
- The Group’s re-engineering of its value chain is translating into operational leverage with digitization enabling
customers to process 97% of all their transactions outside the high fixed cost brick and mortar branches.
- Customers interacting with the bank on self-service channels of mobile and internet devices or on the 3rd party low variable cost infrastructure of 36,000 agents and 42,000 merchants.
- Digital mobile lending saw 92% of all loans processed online
- By virtualizing banking, the
Group has delivered on 24-hour banking services resulting in the convenience of compressing geography and time
and allowing customers to access their money anytime and anywhere
- Total income grew by 9% even with interest rates capping whilst total
costs reduced by 1% and resulted in the Group’s cost income ratio improving to 47.5% from 49.4% the previous
- The Group sustained a high-quality loan book, with NPLs remaining at 6.3% against an industry average of 12%.
IFRS 9 provisions enabled the Group to achieve a 105% NPL coverage.
While the high-volume transactions activity moved from the branches to alternate channels, branch productivity
was enhanced with branch staff focused more on higher value-added services and cross selling the Group’s products
and services to SMEs and Corporates while enhancing client relationship management and customer experience.
Fintech capabilities and innovations saw the Group disrupt Diaspora remittances processing that grew the volume
processed within the quarter to Kshs.18.6 billion up from Kshs.3.2 billion the previous year, an increase of 474%.
This increased diaspora remittance processing income by 183% from Kshs.42 million to Kshs.117 million within a
period of 3 months. Fintech innovation in merchant banking through the introduction of Eazzy Pay mobile point of
sale (POS) that converges payments through cards and mobile wallets in addition to introduction of a merchant POS
able to process all major credit cards in the market, saw the merchant banking volume grow by 36% to Kshs.17.203
billion up from Kshs.12.651 billion with merchant commissions growing by 24%.