The bank boasts a balance sheet worth Tshs 14.3 Trillion as of the end of 2019, and overall, Equity Group has an asset base of USD 9billion and with over 14.2 million customers. With a footprint of 300 branches, 51,560 Agents and 31,265 Merchants and 623 ATMs the Group is one of the biggest banks by customer base in the region and is the largest bank in market capitalization across East and Central Africa.
“This year’s ranking shows stabilisation in the finances of the majority of African major lenders,” asserted Dr. James Mwangi, Managing Director and CEO at Equity Bank.
“Innovation has also been a great enabler in driving growth and is already registering efficiency gains from digitization,” he said
The ranking, which tracks the health and wealth of the African banking sector, uses an array of metrics including the overall growth performance, financial soundness, profits on capital, leverage and return on risk.
In the year under review, Equity improved on its performance with a 14% profit after tax growth to Kshs 22.6 billion from Kshs 19.8 billion in 2018. The impressive performance registered during an interest capping period was driven by a 23% growth in loan book to Kshs 366.4 billion from Kshs 297.2 billion in 2018.
The Group has maintained its yield on interest-earning assets at 11.2% 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 ranked number 5 on the backdrop of an agile balance sheet with a liquidity of 52.1%, a loan deposit ratio of 75.9% and a core capital to risk-weighted asset ratio of 19.8%. The balance sheet reflects solid diversified funding with customer deposits constituting 72% of the total funding, shareholders and long-term borrowing contributing 17% and 8% 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% of the total assets while government securities and cash and cash equivalents contributed 26% and 13% of the total asset allocation respectively.
“The ranking is an indication that Equity remains robust, despite the challenging operating environment. We have developed and adopted a sustainable business model to cushion the business as well as boost value creation for shareholders,” added Dr. Mwangi.
