• Equity Bank Limited
  • XUGA:EBL KAMPALA/Uganda
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  • About the Company
  • Equity Bank has grown to be the largest bank in Africa by customer base. Licenced and cross-listed in Kenya. Has subsidiaries in Kenya, Uganda, South Sudan, Rwanda, and Tanzania.

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Name Title Officer Since
Mr Moses Dhizaala Chairman 2015
Mr B.S Dhaka Managing Director 2015

KEY STOCK DATA

  • Profits
  • $169.54M
  • P/E Ratio
  • 8.2
  • Return on Equity
  • 24.24%
  • Dividend Yield
  • 0.13%
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Revenue per year in US $
Revenue is the money a company recieves for selling its goods or providing services. The higher the revenue, the better the company is performing.

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Overseas banks have carried out an inspection of Kenya Airways’ aircrafts in preparation to repossessing them should it delay to strike a restructuring deal with local banks, the national carrier said yesterday.

In a civil application filed at the Supreme Court of Kenya last month, KQ wants three banks opposed to the debt restructuring process to be compelled to change their mind because it is ‘just and necessary to safeguard the rights and existence’ of the airline.

In an affidavit sworn by KQ’s acting group finance director, Dick Murianki, the airline blames Equity Bank, Ecobank, and Jamii Bora for delaying the restructuring process by filing cases in the High Court and the Court of Appeal.

“I confirm that the failure to determine this application and to set aside the orders granted to the first applicant (Equity Bank) will mean that the airline will in all likelihood imminently cease to operate as the financial accommodation it has been receiving from its creditors was on the basis of the restructuring being completed by end of August 2017,” explained Mr Murianki.

Court papers

Equity’s action, KQ claims, has delayed the restructuring plan and is jeopardising the entire Sh226.5 billon ($2.2 billion) owed to various creditors.

Full article at www.standardmedia.co.ke

Equity Bank has so far issued loans worth Sh57 billion through its platform Equitel launched in May 2014, highlighting Kenya’s growing uptake of mobile lending.

Kenya’s biggest bank by customer numbers said it processed a total of 7.5 million loan requests, with eight out of every 10 loan demands currently being processed and disbursed via Equitel.

The group’s chief executive James Mwangi said the ease of getting credit through mobile phones has seen Equitel average loan size more than double to Sh8,200 in the half-year to June 2017 compared to Sh3,900 in June 2015.

“Increased uptake is due to ease and convenience of access in addition to the quick decision making process. It is self-service,” Mr Mwangi said in an interview.

“The loan recipient doesn’t need security to be eligible for the loan, (and) the loan limits are based on your banking behaviour and credit history.”

Bank-backed lending apps such as M-Shwari, Equitel, M-Co-op Cash, and KCB M-Pesa have greatly transformed how Kenyans access loans, as consumers no longer need to fill lengthy paperwork, provide collateral or undergo vetting by credit officers.

There are also standalone mobile lending apps such as Branch, Tala, Saida and Mombo Mobile, which issue short-term loans via mobile money and charge a processing fee.Facebook-linked Branch mobile app said in July it had disbursed Sh3.6 billion ($35 million) since launching in Kenya in April 2015.

Equity Bank and the Ministry of Agriculture have signed a Sh300 million agreement to finance farmers under phase two of the Agricultural Credit Guarantee Scheme (ACGS), in which the government provides collateral.

The partnership is a risk-sharing arrangement where the government provides a guarantee fund to cushion the participating financial institutions from any proven loss of the outstanding credit amount in default.

The initiative will provide smallholder farmers affordable financial services, boosting commercialisation of farming in a sector plagued by low production, poor marketing, and low financial literacy.

“This signing ceremony clearly symbolises the strengthening of the public-private partnership between a private organisation and the government. Our partnership with Equity Bank will help accelerate efficient and effective service delivery to low-income beneficiaries in the agriculture sector,” said Agriculture secretary Willy Bett.

He said this programme has helped to bring small-scale farmers into the formal financial system. Under the initiative, Equity will also offer farmers other services such as training, savings/deposits and linkage to crop insurance and markets.

The signing of the second phase of the deal marks the third time the ministry is partnering with the bank. The first agreement was in 2008 through the Kilimo Biashara Partnership and the second one in 2011 through the ACGS first phase agreement.

Equity chief executive James Mwangi said the total Kilimo Biashara loans disbursed by the end of last year was Sh7.3 billion and benefited 472,632 farmers since 2008.

Full article at www.businessdailyafrica.com

Kenya’s Equity Bank has started closing some of its automated teller machines (ATMs) as the lender shifts customers to alternative channels in a fresh cost-cutting strategy.

Equity, Kenya’s biggest bank by customer numbers, has so far closed 11 ATM lobbies, each of which had multiple cash dispensing machines.

One in every five ATMs in Kenya belongs to Equity Bank, thanks to an aggressive expansion strategy.

However, banks in Kenya are currently trying to adapt to the challenges of the rate-cap era. Many banks have turned to job cuts, branch closures and deploying technology to cut costs.

President Uhuru Kenyatta introduced the cap last August, ignoring the advice of the Central Bank of Kenya and the Treasury, as he sought to fulfil a 2013 election campaign pledge to lower the cost of credit.

Lenders have faced a reduction in revenue of as much as 25% and are therefore looking to offset the decline.While ATMs require upfront capital investments to acquire the machines and lease space, they also depreciate at 20% annually.Agency and mobile banking have no such capital commitments and have therefore proved a popular measure.This shift was also informed by evolving preferences of Equity Bank’s 9.59mn customers who want to do their banking on the go through mobile phones, or access banking within their neighbourhood via agents.“Last year Equity conducted a survey and the findings were customers prefer self-service digital banking and have a higher preference for convenience in payment platforms and access to loans,” said James Mwangi, CEO

The demand for and opportunities that exist for loan sharks in Kenya are boundless. This has seen all sorts of lenders crop up in corner shops in estates and major town centres. Their advertisements are nearly as impossible to miss as the waganga ones.

Informal lenders once ruled the short-term lending sector, but in the last couple of years, the market has become skewed. Formal lenders have got involved and shifted the focus to mobile-based lending applications.

The biggest players are either backed by formal lenders, such as CBA (M-Shwari), KCB (KCB M-Pesa), Equity Bank (Equitel) and Co-op Bank (M-Coop Cash), or backed by foreign-based venture capitalists, which is where businesses like Tala, Branch and Saida fall.

Mobile lending

Los Angeles-based Tala is financed by foreign venture capitalists that include Artha Indian, Bam, Collaborative Fund and Data Collective.

Branch International, which is based in Silicon Valley, recently received Sh955 million from Andreesen Horowitz, a venture capital firm that’s also based in Silicon Valley, while Khosla Impact Fund and Formation 8 put in Sh140 million.

American seed accelerator YC Combinator finances Saida, a mobile lending app that was co-founded by Kyale Mwendwa and Kenneth Ngetha.According to a recent Village Capital study, more than 90 per cent of funding for East African start-ups goes to expatriate founders, with most early-stage investors in the region being foreigners themselves.But Kenyans are not known to shy away from the challenge of deep-pocketed investors, and are determined to play in the microloans sector, despite the odds.

Dutch banking giant Rabobank, a leading food and agribusiness financier, has joined the list of Kenya’s Equity Bank Group shareholders.

Rabobank will jointly with the Netherlands Development Finance Company, a government-backed institution also known by its Dutch acronym FMO and Norfund, own an 11.99 per cent stake in Equity Holdings.

The shareholding in Equity Holdings is held through Arise, an investment company focused on the banking sector launched early this year.

“Arise is in the process of acquiring minority stakes in both NMB (National Microfinance Bank PLC (NMB) a commercial bank in Tanzania) and Equity Bank.

This is part of its business mandate of strengthening and developing effective financial institutions in Africa in order to spur economic growth and job creation,” Arise said in a statement.

Norfund, Norfinance, Rabobank and FMO contributed different investments already owned by them to the joint entity Arise in return for shareholdings in Arise.

The Africa focussed investment vehicle was formed in February this year with an eye on African financial sector players for acquisitions.Norfund and Norfinance AS (a joint venture investment company between Norfund and Norwegian private investors) two years ago completed the purchase of a 12.223 per cent interest in Equity Group Holdings representing half of Helios Investment Partners’ interest in Equity.“As such they (Rabobank and FMO) swapped their individual shareholdings in different banks for shareholdings in Arise,” Arise said in a statement.

Online payment platform PayPal now accounts for close to 70 per cent of Equity Bank diaspora banking revenue.

Equity Bank data for the first quarter of 2017 shows that the number of PayPal users increased by 47 per cent. This is as a result of increased transaction volumes enhanced by the upgrade of the PayPal system. The system is now able to process customers’ withdrawal transactions within three business days from the previous eight days.

“Equity Bank is concentrating on global money transfer as an alternative income stream. The success of the Bank’s innovation with the PayPal platform has shown significant growth depicting the power of fintech on fully automated processes,” Equity Bank Group CEO James Mwangi (pictured)said.

The service allows Equity Bank customers with a PayPal account to receive payments in 25 currencies.

The Capital Markets Authority (CMA) has expressed concern over the overwhelming dominance of five of the country’s top firms at the bourse.

The regulator in a new report released yesterday said five companies accounted for two-thirds of the total market capitalisation at the Nairobi Securities Exchange (NSE) in the three months to March, exposing the stock market to concentration risk.

The combined market capitalisation of the stocks of Safaricom, East African Breweries, Kenya Commercial Bank (KCB), Equity Bank and British American Tobacco (BAT), the Capital Markets Soundness Report showed, accounted for about 64 per cent of the market capitalisation.

“The top five companies accounted for between 63.7 per cent and 65 per cent of the market capitalisation, which is a heavy level of concentration on a few counters and exposes the market to concentration risks,” said CMA Chief Executive Paul Muthaura during the the report’s launch in Nairobi.

There are 67 companies listed at the NSE. The Capital Markets Soundness Report is a publication on capital markets stability indicators and industry risks.

The Equity Bank Family after scooping 19 Awards out of the 24 possible entries it had submitted for the Think Business Banking Awards2017 held at Radisson Blu Hotel. 

The Bank was crowned the top overall bank in Kenya. Largest lender by deposit accounts, Equity Holdings, emerged the overall winner during the annual banking awards, orgnaised by Think Business, last week.

The top-tier lender scooped 19 awards out of 24 entries it had submitted.

Equity shrugged off strong competition to beat other lenders by ranking first in 13 categories.

It won in mortgage finance, agency banking,retail banking, product innovation, trade financing and the best bank with the lowest charges to individuals.

Other areas it emerged tops were best lender in sustainable corporate social responsibility, micro finance and agribusiness and livestock finance, among others. Group MD James Mwangi was also named the CEO of the year.

“I am humbled by this recognition which further validates our strategy and pursuit of financial inclusion while giving our customers freedom, choice and control,” Mwangi said in a statement yesterday. “We aim to retain this victory in the future and translate this success into a deeper emotional connection with our customers by giving them freedom, choice and control. 

Kenya’s top 10 banks registered a 10.8 per cent growth in net earnings to Sh93.81 billion for the financial year ended December 31, 2016.

The growth was despite four of the lenders – Equity Bank, Barclays Bank of Kenya (BBK), Stanbic Bank and NIC Bank – registering a drop in profits after tax.

Kenya Commercial Bank (KCB), Equity Bank and Co-operative Bank remained the top three most profitable lenders respectively and also the only ones with double-digit-billions profits.

However, for the first time in over 10 years, Equity recorded a drop (5.9 per cent) in profits. Despite KCB Group recording a 0.5 per cent growth in profits, the slowest pace in seven years, KCB Bank saw its after-tax profit soar by 19.9 per cent to Sh19.78 billion.

At the same time, Co-operative Bank registered a 24.6 per cent growth in profit to Sh13.05 billion.