Equity half year profit drops 7.4pc on rate capping
Regional lender Equity Bank has announced a 7 percent drop in its first half net profit as the bank continues to grapple with effects of the interest capping law.
During the six month period, Equity Bank’s profit stood at Sh9.4 billion down from Sh10 billion in 2016.
Announcing the results at an investor briefing on Tuesday, Equity Bank Group chief executive James Mwangi said the capping of interest rates had created a negative impact on the economy.
“The banking industry is going through a difficult environment,” Mr Mwangi told investors.
For instance the Equity’s loan book shrunk from Sh269 billion in 2016 to Sh265 billion as the bank held off lending to the private sector.
This saw interest income drop 12 percent to Sh23 billion.
Mr Mwangi said the bank was focused on prioritizing stability rather than profitability as it adjusts to the new lending regime.
At the same time Equity Bank raised its investment in government securities from Sh73bn to Sh115 billion.
The bank plans to introduce a new business plan focusing on seven key areas.
More to follow…….
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