Equity Bank made 18.9 billion shillings in 2017 full year net profit representing a 14 percent year on year increase weathering a prolonged electioneering period and the effects of interest rate caps.
The profit was driven by a 24 percent growth in non-funded income to 27.6 billion shillings and automation of operations that saw digital platforms handle 94 percent of the lender’s transactions.
The bank has proposed a dividend payout of two shillings per share.
Banks have been posting either flat or reduced profits for 2017 that has been blamed on effects of the cap on interest rates, turbulent economic environment occasioned by the prolonged presidential elections and severe drought that adversely impacted the agriculture sector.
With a tight operating environment due to the banking amendment act 2016 that capped interest rates Equity Group was keen to diversify its income streams.
The lender saw its non-funded income rise 24 percent to 27.6 billion shillings driven by forex income, commissions, trade finance, agency commission and Diaspora remittances.
The bank is crystalizing its digitization strategy riding on self-service digital tools and third party channels.
During the year, the lender’s branches handled four percent of transactions with the remaining 96 percent handled by digital platforms such as equitel, its mobile app and agencies as well as merchants.
The bank’s total interest income dipped 6.5 percent to 48.4 billion shillings despite loans and advances increasing 4.9 percent to 279 billion shillings.