Kenya's Equity Bank profits rise 14pc as growth in deposits, loans slow

Equity Bank has posted a 14.04 per cent increase in profits after tax in the first half of the year that saw a slowing in growth of its loans and deposits.

The bank, which is ranked the second most profitable holding the second largest market share as at the end of 2011 by the Central Bank of Kenya, on Thursday said that profits after tax rose to Sh5.4 billion in the first half of this year, compared to Sh4.73 billion over the same period last year.

James Mwangi, Equity Bank’s chief executive officer said that customer deposits had slowed in the first half of the year, an indication that high inflation had been affecting consumers.

According the results, even though customer deposits had risen to Sh151.1 billion as the end of June this year from 123.9 billion over the same period last year, they only rose by less than one per cent from Sh150.7 billion the end of March this year.

“We see a deposit base that is almost flattening because of the inflation rate,” said Mr Mwangi adding that the bank has a positive outlook going forward as the economic situation in the country improves.

The bank’s customer deposits grew by Sh16.45 billion between the end of June and December last year and by an additional Sh10.26 billion between January and March this year but only grew by Sh398 million in the second quarter of this year.

“All indications are that 2013 will be a slightly better year and we are projecting stronger gross domestic product growth,” said Mr Mwangi.

The bank’s loan book rose by 27 per cent to Sh124.46 billion in the first half of this year from Sh97.71 billion over the same period last year but grew marginally, by 2.75 per cent in the second quarter of this year from Sh121.12 billion as at the end of March.