Effects of Covid-19 Pandemic Felt as Equity Bank Announces Reduced Profit

Days after Safaricom announced a drop in net profit for the third quarter, Equity Bank has followed suit.

And with the covid-19 pandemic hitting businesses hard, the impact has been felt in the banking sector.

Prof Stephen Kiama (2nd right) receives PPEs from Kenya COVID19 Fund Board Secretary Kennedy Kihara (right), Chair Kenya COVID19 Fund Board Health Committee Dr. James Mwangi (2nd left) & Kenya COVID19 Fund Board Health Technical Committee Chair, Prof. Isaac Macharia (left). Image/Courtesy

On Thursday, Equity Bank released its third quarter results showing that its profit reduced by 14 per cent.

MD James Mwangi said that the bank’s profit after tax dropped to Sh15 billion compared to Sh17.5 billion reported in the same quarter last year.

The drop in profit will impact shareholders’ returns on equity which will reduce from 22.9 per cent to 16.9 per cent and return on average assets from 3.7 per cent to 2.5 per cent.

Speaking during the event, MD James Mwangi, noted that in spite of the pandemic, the bank had demonstrated high resilience.

“We grew our loan book by 30 per cent year-on-year in order to support our customers who saw opportunities of green shoots and diversification in the COVID-19 environment,” Mwangi said.

Interest income grew by 22 per cent to Sh39.3 billion from Sh32.3 billion, while non-funded income rose by 11per cent to Sh24.4 billion from Sh22 billion with total income growing by 17 per cent to Sh63.7 billion from Sh54.3 billion.

KCB Group on Wednesday reported a 43 per cent drop in net earnings also on high loan provision.

Equity Bank is now enhancing it’s IT capability to allow digitisation which will enable massive growth in transaction processing volume without growing operational costs, allowing the lender to maintain a low-cost funding.

 

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