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Equity Bank profit after tax declined by 4pc in the first quarter of the year to stand at Ksh 14.8 billion compared to Ksh 15.4 billion the lender reported over the same period last year.
Equity Group Chief Executive Officer Dr James Mwangi has attributed the decline to currency fluctuation and heavy decline in revenue from its South Sudan Subsidiary which booked 68pc drop in earnings from Ksh 3.3 billion to Ksh 1.1 billion.
As a result, Equity Bank South Sudan reported a 104 drop in profit before tax from Ksh 3.1 billion reported over the same period last year.
“Because of stoppage of oil exports inflation went through the roof last year. We had to register a profit of Ksh 3.1. This year the situation is different because there is no inflation accounting,” said Mwangi.
The bank drop in profit as also undermined by decline in total income which decreased by 4pc to Ksh 48.2 billion from ksh 50.1 billion reported over the same period last year.
During the quarter, net interest income increased by 3pc to Ksh 28.6 billon while non-funded income dipped by 12pc to Ksh 19.6 billion from Ksh 22.3 billion reported last year.
In three months of the year to March this year, the lender saw its deposits increase by 3pc to Ksh 804 billion.
Equity Bank Kenya continues to power the group’s bottom-line contributing 57pc of net profit while the five subsidiaries contributing the remainder.
“Kenya is now contributing 53pc of our deposits while the subsidiaries contribute 47pc,” added Mwangi.
Nonetheless, the bank still witnessed high ratio of None-performing loans in Kenya which Dr Mwangi says is not a cause for alarm to the lender.
“If you look at country level, our problem is in Kenya with NPL ratio of 19pc which is the highest followed by Uganda at 13.6pc, Equity BCDC 8.9pc, Equity Bank Tanzania 3pc and Equity Bank Rwanda 2.9pc,” said Mwangi.
Majority of NPLs was recorded in the corporate sector, followed by Micro, Small and Medium Enterprises (MSMEs) and retail sectors.
