Equity Bank Half-Year Profit Doubles

Equity Bank Group has nearly doubled its profits, reporting a 199 per cent increase in pre-tax profit for the six months ending June 30, 2008.

The bank, which recently branched to Uganda by buying out Uganda Microfinance Limited, reported Sh3.08 billion against Sh1.03 billion reported in June 2007.

The Uganda subsidiary is set to be re-branded Equity Uganda Limited, once it converts to a commercial bank in the course of the year.

The 6-month pre-tax profit is more than the Sh2.36 billion profit the bank reported in the whole of 2007. That is despite the post-election violence that rocked the country early this year, slowing down business activities.

"We were fortunate in that our nationwide presence cushioned us against the adverse effects of the post-election violence that hit certain parts of the country," Dr James Mwangi, the

bank's chief executive officer, said while releasing the results.

Dr Mwangi attributed the performance to the institution's ability to balance growth, profitability and its control systems.

Institutional investor

The group, together with its institutional investor, British American Investments Group, also bought a 24.9 per cent stake in mortgage firm Housing Finance last year.

During the period under review, total assets grew in the six months to Sh72.5 billion this year up from Sh29.9 billion in 2007, a growth of 142 per cent. Over the same period, the bank's number of deposit accounts stood at about 2.5 million accounting for over 45 per cent of all deposit accounts in the country's banking industry, while the number of loan accounts stood at slightly half a million.

The bank's cost to income ratio improved from 60 per cent to 53 per cent despite the rapid growth, showing improved efficiency.

While its total operating income increased by 156 per cent to stand at Sh6.58 billion from Sh2.57 billion in June 2007, the Group's total overheads increased by 128 per cent to reach Sh3.5 billion.

"Improved efficiency as a result of economies of scale emanating from our robust information technology platform is also a major contributor to our performance," Dr Mwangi said.

During the period, and in what signifies that the bank has deployed the recent capital investment by Helios, the group's consolidated loan book increased to Sh36.2 billion up from Sh14.3 billion, a 153 per cent growth.