Awards for Excellence 2016
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This year’s winner of best bank in Africa is the first east African bank to be awarded that distinction, Kenya’s Equity Bank, led by James Mwangi. While present in relatively few markets compared with pan-African giants such as Ecobank, the institution has repeatedly demonstrated that it is a role model for how banking should be done on the continent.
In its home market it is a dominant force in both SME financing and digital banking – the two most-important areas of banking in Africa today.
Despite the challenging economic environment in 2015, the bank registered a pre-tax profit of KSh22.4 billion ($222 million), up from KSh20.1 billion in 2014.
The bank’s strategic focus on SMEs led to a 19% increase in non-funded income to KSh21.9 billion. The SME strategy also drove the loan book and deposit growth. The loan book grew by 26% to KSh269.9 billion. This resulted in interest income growth of 23% to KSh43.5 billion. Deposits grew by 23% to KSh302.2 billion, resulting in interest expense growth of 51% to KSh9.3 billion.
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James Mwangi, |
The improvements were further supported by the bank’s digitization programme. New income streams, built on the Equitel mobile banking channel, saw mobile customer numbers grow by an impressive 215%, to 1.6 million in 2015. The value of mobile banking transactions grew to reach KSh115 billion.
Complementary to the mobile banking channel is agency banking, which saw transactions increase 35% to 51 million and the number of agents grow to nearly 24,000. The customer base of the bank is now 8.78 million.
Being the strongest bank in the part of Africa that grew fastest in 2015 – and is likely to be the fastest-growing this year too as growth in southern and western parts of the continent stalls – is another advantage for Equity Bank
The bank’s return on average core capital was a high 37.1% last year. The bank is over 72% funded by low-cost deposits, which has enabled it to achieve a very low cost of funds of 3%. In what was an all-round stellar year, Equity Bank also reduced its non-performing loan ratio from 4.2% to 3%.
