NAIROBI, Kenya, Apr 23 – Equity Bank has announced a 118 percent increase in its pretax profit for quarter one of 2010, posting Sh2.035 billion.
In the corresponding period of March 2009 the bank posted Sh933 million.
Briefing investors on Friday, Equity Bank Chief Executive James Mwangi attributed the results to management of risk that improved the macroeconomic environment as well as improved governance efficiencies.
“The results for the first quarter show where the power of the company is and if it continues to do well then it is a matter of time (before we become) the biggest bank,” said Mr Mwangi.
The impressive results posted by the bank’s Kenyan operation were sharply contrasted by the overall group performance which managed a 43 percent growth in the first quarter.
In the period, the group – that includes operations in Southern Sudan and Uganda – was able to grow to Sh1.7 billion from Sh1.2 billion in 2009.
Mr Mwangi is however confident that their operations would break even by June.
The Ugandan outfit posted a Sh500 million loss but the Southern Sudan operation was able to contribute Sh50 million in profits to the group.
During the period under review, the group’s total assets grew 33 percent to Sh111 billion on the back of a 37 percent net increase on loans and advances to its customers.
The bank disbursed a total of Sh68.6 billion compared to Sh49.4 billion the previous year.
The group’s non-interest income grew by 38 percent to Sh4.65 billion with the growth attributed to an increase in net income, which stood at Sh2.8 billion.
Loans and deposits both grew at 40 percent while deposits rose to Sh77.5 billion. Mr Mwangi now predicts the balance sheet will return to high growth.
Given the bank’s size in terms of regional representation and customer base, Mr Mwangi said the next step would be to seek partnerships in innovative financial services that are attractive for clients as well as mutually beneficial for customers and partners.
“Kenya is embracing technology and the success of products such as withdrawal of cash by M-Pesa customers at Equity ATMs shows that there is need for financial services to the under-banked to keep up with technology penetration,” he said.
Mr Mwangi expects the bank to post impressive results through the year as weather conditions improve which he said would see agriculture play a major role.
“The rural branches this year will lead in terms of performance because they are weather driven and that is why Equity is driving the agriculture reform because if we do it effectively we will lock out the others from the rural areas,” he said.