Kenya’s Equity Group Holdings doubled its rate of profit growth last year and anticipates its subsidiary in Uganda and others in the region to bolster profit this year, its top officer said on Thursday in Nairobi.
Equity Bank, which also operates in Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo, had its pre-tax profit rise 8 percent last year, up from 4 percent in 2016. This was attributed to higher commissions from foreign exchange trading and trade finance, CEO James Mwangi said.
Equity Group’s banking business in Kenya, where it is the biggest lender by customers, provides the bulk of profits but figures show subsidiaries outside Kenya are also growing in importance.
The Bank said pre-tax profit rose to Ksh26.88b in 2017 from Ksh24.93b a year earlier.
The group’s regional businesses, its mobile phone-based financial business, insurance agency and investment bank contributed 14 percent of last year’s profit and Mwangi said that would rise to 20-25 percent this year.
“What is driving the growth rate of the loan book in DRC, Rwanda, Tanzania and Uganda is GDP growth rate. They are moving pretty well,” he said as he briefed investors.
The net interest margin dropped to 8.5 percent last year from 11.6 percent a year earlier. Its bad debts fell slightly to 6.3 percent from 6.8 percent the previous year, well below the industry average of 10.6 percent.