Regional lender Equity Bank recorded a five per cent growth in net profit for the three months to March 31, weighed down by a surge in bad debts and slower growth in interest income from loans and slower growth of fees and commissions on banking transactions.
The lender’s profit after tax grew to Ksh6.15 billion ($61.5 million) from Ksh5.86 billion ($58.6 million) in the same period last year, with gross non-performing loans jumping 62 per cent to Ksh29.39 billion ($293.9 million) from Ksh18.1 billion ($181 million) in the same period last year.
The lender’s Tanzanian and South Sudan subsidiaries posted the highest volume of bad loans constituting 32 per cent and 13 per cent of the lender’s total loan book respectively in the three-month period under review. They were followed by South Sudan (13 per cent), Kenya (nine per cent), Democratic Republic of Congo (eight per cent), Rwanda (four per cent) and Uganda (two per cent).
Equity’s stock at the Nairobi Securities Exchange fell 1.15 per cent to Ksh40.5 ($0.40) per share on May 9 from the previous day’s Ksh41.65 ($0.41) on news of its financial performance. Its interest income grew six per cent to Ksh 13.49 billion ($134.9 million) from Ksh12.66 billion ($126.6 million) while non-interest income increased seven per cent to Ksh7.18 billion ($71.8 million) from Ksh6.71 billion ($67.1 million).