Equity Bank announced its financial results for the 9 months ended the 30th of September, 2021 yesterday
10 Key highlights from the bank Q3 Performance
1️⃣ Profit after tax grew by 79% to Ksh 26.9bn. This is higher than any profits that the bank has ever made in a full financial year.
2️⃣ Non-funded income which shows how a bank is utilizing its digital channels and flexible cost channels outside the branches such as point of sales machines and agency banking grew by an impressive 29% to Ksh 31.4bn from Ksh 24.3bn as compared to the first nine months of 2020.
3️⃣ E-Commerce revenue stood at Ksh 935m. In August 2020, the bank’s Payments Directorate set-up an e-commerce Payments Unit focusing on Online Acquiring, API Monetization, and Marketplace business as channels for facilitating payments within the e-commerce ecosystems. In the second half of 2020, the Bank onboarded some of the largest Fintechs in Africa i.e. Flutterwave to digitize Uber Driver daily cash collections, in addition to online acquiring. Others were Cellulant, Payfer, and Multigate.
4️⃣ Total payments revenues grew by 37% to stand at Ksh 7.4bn from Ksh 5.4bn in the first nine months of 2020. Payments are in the velocity pillar of financial services with great upside potential as more businesses and individuals embrace cashless payments. Merchants digital payments ‘Pay with Equity” (PWE) transactions grew by 408% from 3.1 million transactions to 15.8 million transactions while the value of the transactions grew by 392% from Kshs.17.1 billion to 84.1 billion
5️⃣ Diaspora remittances grew by 22% to Ksh 257bn while commissions were flat at Ksh 1.2bn. The bank’s payment partners include Paypal, WorldRemit, Wave, Western Union, HomeSend, TerraPay, SmallWorld, Thunes, Hellopaisa among others, giving their customers freedom of choice.
6️⃣ The bank continued to tick all the right boxes as FX Trading ballooned by 56% to Ksh 6.2bn driven by diaspora remittances which contributed to the 28% of the Ksh 6.2bn
7️⃣ Bonds trading stood at Ksh 2.6bn from Ksh 2.2bn in the previous year. According to a presentation by NSE CEO Mr. Geoffrey Odundo at the 2021 ICIFA Conference, Kenya has the best domestic sovereign bond market in Africa with the market capitalization of bonds now higher than that of listed shares.
8️⃣ The group’s cost to income ratio was 54.9% while that of Equity Bank Kenya was 42% showing how Equity Bank Kenya is benefitting from the fruits of digital transformation. The cost to income ratio shows how efficient a bank is in utilizing its resources to generate income. Innovative leaders use less to achieve more.
9️⃣ Regional subsidiaries grew their Group contribution to deposits to 42% up from 40%, revenue to 37% up from 30%, and profit before tax and provisions to 26% up from 21%. EquityBCDC made a profit after tax of Ksh 2.2bn to become the most profitable subsidiary ahead of Equity Bank Uganda which made a net income of Ksh 2.1bn. Equity Bank Rwanda came third with a net profit of Ksh 1.2bn.
🔟 Equity Insurance agency which leads the bank’s bancassurance efforts made a profit after tax of Ksh 400m in nine months. Companies that have managed to substantially grow their customer base through network effects use land and expand strategy to deepen their offerings to customers which is the hallmark of platform businesses. This diversifies risk and gives them optionality.
Source: Company filings