Equity Group Holdings Plc defense against the interest rate caps introduced in September 2016 has begun paying off if results for first quarter 2017 are anything to by.
Results released yesterday show that the banking group squeezed extra income from its operations to reduce the impact of lower interest margins from loans and advances.
As interest income on loans shrunk 26.86 percent from Sh11.46 billion in a similar period last year to Sh9.19 billion following the bank’s decision to slow down on lending, interest from government securities increased 131 percent to Sh2.96 billion from Sh1.28 billion.
Income from government securities was a result of the banking group’s move to build liquidity by increasing its increasing its investment in government papers by 97.1 percent from Sh62.3 billion to Sh122.9 billion.
At the same time, the banking groups non-interest income increased by 21 percent to Sh6.3 billion from Sh5.2 billion. Growth in non interest income was driven by fees and commissions from loans and advances which recorded a 48 percent jump to Sh1.377 from Sh930 million. Other fees and commissions grew 19.2 percent to Sh3.1 billion from Sh2.6 billion in 2016.
Group’s after tax profit 5.88 percent to Sh4.8 billion from Sh5.1 last year.