Equity bank with a balance sheet size worth Kshs. 673.7 billion at the end of 2019, has been listed 7th among the top 10 Banks in Africa in 2020 with a score of 5.82 in the overall category of the best performing banks.
This is according to The Banker’s Top 100 African Banks ranking for 2020.
The bank becomes the 1st bank in Eastern and Central Africa to achieve this milestone paving way for East African banks to play in the league of big banks with South Africa, North Africa and West Africa.
On soundness, the bank was ranked 5th while on growth performance the bank ranks position 9.
Equity also ranked 8th in return on risk and 6th on leverage category while on profitability the bank was ranked number 6.
This year’s ranking shows stabilisation in the finances of the majority of African major lenders.
The ranking, which tracks the health and wealth of the African banking sector, used an array of metrics including the overall growth performance, financial soundness, profits on capital, leverage and return on risk.
In the year under review, Equity improved on its performance with a 14 percent profit after tax growth to Kshs 22.6 billion from Kshs 19.8 billion in 2018.
The impressive performance registered during an interest capping period was driven by a 23 percent growth in loan book to Kshs 366.4 billion from Kshs 297.2 billion in 2018.
Commenting on the group’s performance, Dr. James Mwangi, Managing Director and CEO said that, the enhanced efficiency and cost optimization saw cost-income ratio improving to 51 percent from 52.4 percent in 2018.
The group has maintained its yield on interest-earning assets at 11.2 percent despite the challenge of interest capping and declining yield curve.
Innovation has also been a great enabler in driving growth and is already registering efficiency gains from digitization.
On financial soundness, the bank ranked number 5 on the backdrop of an agile balance sheet with a liquidity of 52.1 percent, a loan deposit ratio of 75.9 percent and a core capital to risk-weighted asset ratio of 19.8 percent.
The balance sheet reflects solid diversified funding with customer deposits constituting 72 percent of the total funding, shareholders and long-term borrowing contributing 17 and 8 percent respectively.
The financial soundness is further enhanced by a strong capital base, which is well within both internal and regulatory limits, solid business performance and Net loans which constituted 54 percent of the total assets while government securities and cash and cash equivalents contributed 26 and 13 percent of the total asset allocation respectively.
“The ranking is an indication that Equity remains robust, despite the challenging operating environment. We have developed and adopted a sustainable business model to cushion the business as well as boost value creation for shareholders,” said Dr. Mwangi.
The Banker Top 1000 World Banks 2020 ranked Equity Bank 754 in balance sheet size overall in its global ranking, 62nd in soundness (Capital Assets to Assets ratio), 55th in terms of Profits on Capital and 20th on Return on Assets.