Equity Bank bets on EAC subsidiaries to grow profits

Kenya’s Equity bank recorded a profit before tax of Sh24billion for full year 2015, compared to Sh22.4billion the lender realized a year earlier, representing a 7.7 per cent jump.

The lender attributed the flat growth to 17 per cent rise in net interest profits.

Equity Bank also disclosed Tuesday at an investor briefing that it is betting on its EAC subsidiaries to more than double their contribution to group profit this year as lending through its mobile banking business continues to grow.

Equity has operations in Uganda, Tanzania, South Sudan, Rwanda and Democratic Republic of Congo which jointly contributed 23 percent of total assets, 23 percent of total deposits, 17 percent of its loan book and 6 percent of the group’s profits.

“We want to make these divisions to contribute at least 30 percent of the assets and hopefully contribute 15 percent of the profitability,” said Chief executive James Mwangi.

Last year was a torrid period for the lender due to depreciation in regional currencies against the dollar, more so in war-ton South Sudan as well as volatility in interest rates.

Equity, the biggest bank in Kenya by number of depositors, recorded profits in net interest income to Sh 34.1 billion during the period under review against Sh29.2 billion it registered in 2014.

The bank’s total assets rose to Sh428.1 billion from Sh 344.6 billion while customer deposits rose to Sh 302.2 billion compared to Sh 245.6 a year earlier.