Equity to focus on digital banking as Q3 profit hits Sh15bn

Equity Bank has reported a pretax profit to Sh21.5 billion, up from Sh18.15 billion in the corresponding 2015 period.

During nine month period, the bank’s interest income rose to Sh32.3 billion on higher loans disbursement.

Releasing the results on Thursday, Equity Bank Chief executive officer James Mwangi said increased focus on digital banking would position the lender to lower costs and operate efficiently.

“Digitisation and launch of Eazzy pay and Eazzy Biz are likely to have current account and transaction floats increase significantly,” Mr Mwangi said.

During the quarter, the bank saw the volume of loans disbursed on its mobile platform rise to Sh30 billion at the end of September from Sh1.6 billion in the same period in 2015.

The bank has increasingly been focusing on mobile and digital banking to offset the effects of the government’s decision to cap interest rates.

In August, President Uhuru Kenyatta enacted the Bank Amendment Act, which caps interest rates at not more than four percent of the central bank rate (CBR).

Equity has even suspended branch expansion as it positions itself to take advantage of the changing consumer trends with most customer prefers alternative channels.

Mr Mwangi however said the law had positively affected the bank’s performance posting a 26 percent net interests to sh32.3 billion.

“Equity is competing with the perceived zero risked government bonds in terms of storage of value. One can see how positively the bank has been affected by the shift in the market place and decisions the market is making” Mr Mwangi said.

Total assets rose to Sh468 billion, from Sh445.75 billion at the same time last year.

Mr Mwangi hinted the bank would also focus on aggressively positioning its regional subsidiaries to shore up revenues.

“Yes we have capped interest rates in Kenya but 30 percent of our assets are not eligible to that rule,” he said.

Equity, which operates in Uganda, Tanzania, South Sudan, Rwanda and the Democratic Republic of Congo, has over the years focused on the low income segment of the market.

Tags:

James Mwangi Uhuru kenyatta Digital Banking equity bank CBR Equitel Mobile Banking interest rate cap government securities regional expansion third quarter results Eazzy Banking

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