Group Chief Executive and Managing Director, Dr James Mwangi attributed the Bank’s impressive results to the massive growth in number of customers, which went up by 1.5 million. During the same period, customer deposits grew by 50 per cent. The Bank continues to enjoy a spiraling rate of customer satisfaction as the numbers grew from 4.4 million in 2009 to 5.9 million by December 2010. Customer deposits grew from Sh 69.8 billion in 2009 to Sh 104.4 billion in 2010.
Equity Bank was recently named by Interbrand Sampson Kenya’s most preferred & trusted bank. Its banking model has emphasised on affordability, ease of access, relevant products and customer experience.Just last year Equity was named Kenya’s top brand by Synovate, adding yet another accolade to its enviable position.
“We harnessed the growth in customer numbers using our robust, high availability level 4 data center. The growth in deposits, coupled with a strengthened treasury and trade finance department, resulted in growth of investments in government securities and cash & bank deposits by 165 per cent and 42 per cent respectively and attendant interest income growth of 85 per cent and commission income & fees by 440 per cent,” said Dr Mwangi.
Growth in lending, buoyed by the growth in deposits, resulted in a growth of 28 per cent in interest income up from 10.8 billion in 2009 to peak at Sh 13.8 billion in 2010. Total operating income for the period grew by 41 per cent from Sh 15.7 billion in 2009 to Sh 22.2 billion in 2010. Total operating expenses on the other hand grew by 26 per cent from Sh 10.5 billion to Sh 13.2 billion in 2010.
Dr Mwangi attributes the phenomenon success to improved efficiency as reflected by improved cost to income ratio which decreased from 67 to 60 per cent last year. As part of the success story, gross non performing loans declined by 18 per cent from Sh 5.33 billion in 2009 to Sh 4.4 billion in 2010 while asset quality improved to 3.7 per cent in 2010 from 4.7 per cent in 2009.
“At Equity Bank we have, indeed, been humbled by the support extended to us by the increasing number of our members. We owe our success to the community which has made us their preferred financial partner,” said Dr Mwangi. “It is in appreciation of the massive support from Kenyans that we are responding by engaging in heavy investment in social and economic development initiatives,” said he.
Efforts by the Bank to engage in sustainable social investment programmes such as the recently launched Sh 4 billion Wings To Fly Scholarships and Leadership Mentoring Program in addition to the Sh 1 .1 billion financial literacy program targeting 619,500 women and youth have significantly enhanced the Bank’s brand.
New lines of business have gone well, with Southern Sudan operations contributing Sh 349 million in profits in the first year. Equity Insurance Agency contributed Sh 67 million while the custodial business generated Sh 155 million. Equity Uganda operations stabilised after massive rebranding, branch expansion and capacity building.
For the shareholders, 2010 was an excellent year. Profit after tax grew by 69 per cent to Sh 7.2 billion up from Sh 4.2 billion in 2010. Proposed divided doubled to Sh 3 billion up from Sh 1.5 billion in 2009. Earnings per share increased by 69 per cent to Sh 1.93, up from Sh 1.14 in 2009. Returns on equity increased by 43 per cent to 28.5 per cent in 2010 up from 20 per cent while return on assets grew by 23 per cent to 5.8 per cent up from 4.7 per cent.
The Bank continues to focus on alignment to customer needs, business model and innovation such as the convergence with telecoms. Innovative products such as M-Kesho, Orange Money and Yu-Cash, along with agency banking will continue to generate and drive value while at the same time providing convenience and accessibility for the customer.
About Equity Bank Group
Equity Bank commenced business on registration in 1984. It has evolved from a Building Society, a Microfinance Institution, to now the all-inclusive Nairobi Stock Exchange and Uganda Securities Exchange public listed Commercial Bank. With over 5.9 million accounts, accounting for over 57% of all bank accounts in Kenya, Equity Bank is the largest bank in the region in terms of customer base and operates in Uganda and Southern Sudan.
By DEA REPORTER
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