By M&M Reporter
Equity Group Holdings has defied a difficult operating environmentfor Kenyan banks to post 8 percent growth in net earnings.
In results for third quarter ending September 2018 released today the banking group’s profit after tax jumped to Sh15.8 billion compared to Sh14.6 billion same period last year.
The operating environment in the last nine months was characterized by volatility in the business environment resulting in elevated inflation, continued interest rate capping causing a credit crunch, and a lowered Central Bank Rate which dipped the yield on loans, said the bank in a press statement announcing the results.
Equity Group has reported differentiated revenue growth of 1 percent to Sh49.3bn up from Sh48.7bn, despite the impact interest rates cap and the challenging operating environment have had on the banking sector.
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 business model has proven that the Group is not dependent only on the loan book income to drive shareholder value,” Equity Group Managing Director and CEO Dr. James Mwangi said.
Mwangi said the group was reaping the benefits of a strong social brand that focuses on enhancing our relationship with the community through a shared prosperity approach to business.
“This, coupled with a staff force that is talented, passionate and committed to our shared vision of transforming the lives and livelihoods of our people gave the Group a strong foundation to confront and defy a perfect storm,” he said.
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 percent of transaction volume.
Eazzy Banking App grew by 208 percent to 168 million transactions from 55 million year on year and a value of Sh89bn from Sh52bn year on year. Eazzy Biz, which is a cash management solution for SMEs had a rapid adoption in the market that resulted in a growth of 148 percent year on year with a transaction value of Sh187.3bn from Sh90.9bn year on year.
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 Sh11.07bn from Sh11.06bn YoY, while transaction volumes declined from Sh14.4 million to Sh13.5 million as customers preferred to transact on the self-service channels.
Equitel’s transaction value grew by 20 percent to Sh425.1bn up from Sh353.6bn despite a slight decline in transaction volumes to 185.4 million from 197.1 million year on year