Diaspora remittances through Equity Group have grown 57.8 percent to Sh106.9 billion in the six months to June, raising the lender’s commissions by more than half, the bank has said.
The remittances value rose from Sh66.6 billion in the first half of 2019, with the lender linking the rise to innovation on its fintech platform.
Equity Group chief executive James Mwangi said the increased handling of remittances helped the lender to mitigate against the loss of fees and commissions from mobile transactions and merchant banking.
Diaspora remittances through Equity Group #ticker:EQTY have grown 57.8 percent to Sh106.9 billion in the six months to June, raising the lender’s commissions by more than half, the bank has said.
The remittances value rose from Sh66.6 billion in the first half of 2019, with the lender linking the rise to innovation on its fintech platform.
Equity Group chief executive James Mwangi said the increased handling of remittances helped the lender to mitigate against the loss of fees and commissions from mobile transactions and merchant banking.
“Resources were dedicated to enhancing fintech innovation in diaspora remittances to enable social payments to reach families that saw regional diaspora remittances growing by 57 percent,” said Mr Mwangi.
During the review period, the Central Bank of Kenya data showed that Kenyans sent home Sh157.91 billion ($1.46 billion).
The disclosure implies that 67.7 percent of the cash sent home by Kenyans living and working abroad for family support, payments and investments passed through the bank.
Handling of more diaspora remittances helped Equity earn Sh601 million as fees from the service, up 51 percent from Sh398 million in the corresponding period in 2019.
That means Equity earned a fee of Sh5.62 million for every Sh1 billion diaspora cash transfer it processed.
Equity on Tuesday announced a 24.3 percent decline in half-year net profit to Sh9.02 billion after the lender increased provisioning for loan defaults nearly nine times to reflect the economic hardships facing borrowers due to Covid-19.
The fall in group profit was despite net interest income growing by 16.9 percent to Sh24.6 billion as the lender’s loan book expanded by Sh70.7 billion or 22 percent to Sh391.6 billion. Equity’s non-interest income, mainly earned from fees and commissions, dipped by Sh2.1 billion or 13 percent to Sh14.4 billion.
The drop in non-funded income was attributed to waivers on bank-to-mobile wallet transaction fees and reduced transactions given the weak economic activities.
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