-The bank’s portion of non-funded income to total income grew
from 33% to 41.4% depicting the quality of the revenue streams.
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| Equity Bank CEO Dr. James Mwangi |
Equity Bank plans to optimize diversified
revenue strategy as it shifts its focus to non-funded earnings to boost
performance.
The bank’s non-funded income grew by 21% from KShs 5.2Bn to
KShs 6.3Bn reducing the effects of
reduced interest income on total income. The net effect of these resulted in
only a 3% reduction in total income to KShs 15.2Bn from KShs 15.6Bn.
Speaking during the release of 2017 Q1 financial results,
Equity Bank CEO Dr. James Mwangi said that, the shift to non-funded income has
increased and enhanced the quality of earnings significantly by reducing the
risked income to non- risked income. The contribution by non-funded income have
surpassed this year’s target of 40% to record a 42% growth making it a game
changer for the bank.
The sustainable initiatives that the bank has employed for the
past one year, are now paying off through improved performance directly linked
to its strategy. Part of this initiatives include the mobile banking strategy
where transactions have grown by 75 % to KShs 308.8mn up from KShs 176.9Mn.
Equity’s diaspora remittances are up 79% to Kshs 130.1mn from Kshs 72.5mn;Trade
Finance income has increased by 78% to KShs 282.8mn from KShs 159mn, Swifts,
RTGS has grown by 28%, and agency banking by 19 % while merchant commissions up
by 8%.
Moving forward, the bank also plans to grow treasury, forex and fixed income trading to
be part of growing list of alternative revenue streams. This reflects a
scalable and sustainable plan by the lender as it grows its revenue lines to
compensate for the interest income which has been affected by the rates
capping.
During the first quarter of the year, Equity has emerged as
the most profitable bank in Kenya with a profit before tax of Kshs 6.9Bn.
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