Equity Group has posted a pre-tax profit of Ksh. 24.78 billion shillings in the first nine months of the year up from Ksh. 22.41 billion recorded in a similar period last year. This translates to an 11 percent jump in pre-tax profit.
According to Reuters, the bank’s net interest income in the period under review rose from Ksh. 29.5 billion to Ksh. 32.29 billion while non-funded income stood at Ksh.22.54 billion up from Ksh.19.8 billion registered in the first nine months of 2018. The bank has attributed the strong performance to the growth of its lending and non-funded income.
Equity has become the first lender in the country to unveil its financial results ever since Parliament assented to President Uhuru Kenyatta’s memorandum to repeal the rate cap. The rate cap according to Central Bank Governor Patrick Njoroge had stifled access to credit by Small and Medium Enterprises (SMEs) and affected the effectiveness of monetary policy.
“The last three years gave us an opportunity to reinvent ourselves. We saw the interest rate cap as a new normal. The interest rate cap removal can only be a bonus,” Equity’s CEO is quoted as saying by Reuters when he made the announcement at an investor briefing on Tuesday.
Reuters similarly reports that the bank makes most of its profit from its businesses in Kenya but ever since the introduction of the rate cap in August 2016, the bank has had to shift its attention on its regional subsidiaries to improve its profits. The bank is currently in the process of acquiring four lenders in Rwanda, Zambia Mozambique and Tanzania from London listed firm Atlas Mara Limited in an effort to grow its regional businesses.
Equity will use share swap deals to acquire a 62 percent share in Banque Populaire du Rwanda, BancABC Tanzania and Mozambique and Atlas Mara Zambia. On the other hand, Equity will offer 6.72 percent of its shares worth Ksh. 10.9 billion to Atlas Mara. The four banks have a total of 822,000 customers, a combined loan book of Ksh.51.8 billion and deposits worth Ksh.96 billion.
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