One of Equity Bank branches in Zanzibar located at Mlandege Street Nairobi, Kenya. E quity Bank, with a balance sheet size worth Tsh 14.3 trillion at the end of 2019, has been listed at number 7 among the top 10 Banks in Africa in 2020 with a score of 5.82 in the overall category of the best performing banks. This is according to The Banker’s Top 100 African Banks ranking for 2020. This year’s ranking shows stabilisation in the finances of the majority of African major lenders.
The ranking, which tracks the health and wealth of the African banking sector, used an array of metrics including the overall growth performance, financial soundness, profit on capital, leverage and return on risk. In the year under review, Equity Bank improved on its performance with a 14 percent profit after tax growth to Tsh 481.4 billion from Tsh 421.7 billion in 2018. The impressive performance registered during an interest capping period was driven by a 23 percent growth in loan book to Tsh 7.8 trilion from Tsh 6.3 trilion in 2018. Commenting on the Group’s
performance, Dr James Mwangi, Managing Director and CEO said that, the enhanced efficiency and cost optimization saw cost income ratio improving to 51 percent from 52.4 percent in 2018. The Group has maintained its yield on interest earning assets at 11.2 percent despite the challenge of interest capping and declining yield curve. Innovation has also been a great enabler in driving growth and is already registering efficiency gains from digitization.
On financial soundness, Equity Bank ranked number 5 on the backdrop loan agile balance sheet with a liquidity of 52.1 percent, a loan deposit ratio of 75.9 percent and a core capital to risk weighted asset ratio of 19.8 percent. The balance sheet reflects solid diversified funding with customer deposits constituting 72 percent of the total funding, shareholders and long term borrowing contributing 17 percent and 8 percent respectively. The financial soundness is further enhanced by a strong capital base, which is well within both internal and regulatory limits, solid business performance and Net loans which constituted 54 percent of the total assets while government securities and cash and cash equivalents contributed 26 percent and 13 percent of the total asset allocation respectively.
“The ranking is an indication that Equity Bank remains robust, despite the challenging operating environment. We have developed and adopted a sustainable business model to cushion the […]
