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Equity Bank profits soar

NAIROBI, Kenya Apr 29 – Equity Bank\’s after-tax profit has risen by 87 percent to Sh2.33 billion for three months to March 2011 up from Sh1.2 billion during the corresponding period in 2010.

The bank\’s net interest income grew 37 percent from Sh2.6 billion to Sh2.6 billion largely driven by the 30 percent growth of its loan book to Sh86.2 billion.

Briefing investors on Friday, Equity Bank Chief Executive Officer James Mwangi said the bank was able to withstand tough economic conditions experienced in the first quarter, thanks to the strategic momentum built by the bank in 2010.

"This was through our strategic options particularly convergence with the telecoms.  We have seen transactions continue to increase at the bank resulting in the 87 percent growth," Mr Mwangi said.

He said Equity bank would continue focusing on the micro, small and medium enterprise sector, which he said, had shown demand for financial services by opening accounts and taking out loans.

He said through the bank\’s Sh30 billion MSE fund, interest income could increase by over 40 percent in 2011.

Customer deposits grew by 48 percent to close at Sh114.3 billion up from Sh77.4 billion during the same period last year buoyed by the growth in clients of 1.7 million to hit the 6.2 million clients.

"Our efforts to ensure sustained growth for this bank and for the regional economies at large have served to further endear us to the wider community as attested by the growing customer deposits and building of a strong brand," he said.

Non-interest income, mainly transactions income, fees and commissions\’ income and trading income on treasury bonds rose from Sh2 billion to close at Sh2.9 billion reflecting a 44 percent growth.

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The bank continued to focus on its operational efficiency with cost to income ratio reducing to 56 percent from 64 percent compared to the same period last year. The cost to income ratio net of provisions reduced to 45 percent from 53 percent for the same period.

Regionally, Equity Bank plans to open two branches in Southern Sudan in the second quarter and five branches each in Rwanda and Tanzania by the end of 2011.

Mr Mwangi said one line the bank would be growing in 2011 is its mortgage business saying it was going to become a major function for the bank in future.

"We now think that we are ready, we have built all the necessary structures that we can roll out mortgages through our branch and agency network," he said.

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