Equity Bank, a subsidiary of Equity Group Holdings Plc 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, profits on capital, leverage and return on risk.
In the year under review, Equity improved on its performance with a 14 per cent profit after tax growth with performance registered during an interest capping period in Kenya driven by a 23 per cent growth in loan book.
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 per cent from 52.4 per cent in 2018.
The Group has maintained its yield on interest-earning assets at 11.2 per cent 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 liquidity of 52.1 per cent, a loan deposit ratio of 75.9 per cent and a core capital to risk-weighted asset ratio of 19.8 per cent.
The balance sheet reflects solid diversified funding with customer deposits constituting 72 per cent of the total funding, shareholders and long-term borrowing contributing 17 per cent and 8 per cent 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 per cent of the total assets while government securities and cash and cash equivalents contributed 26 per cent and 13 per cent 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.
The Banker Top 1000 World Banks 2020 ranked Equity Bank 754 in balance sheet size overall in its global ranking, 62nd in soundness (Capital Assets to Assets ratio), 55th […]