Equity lays off 200 S.Sudan staff amid political tension, earnings drop
Tuesday August 22 2017
Equity Bank chief executive James Mwangi. Equity, which had thirteen branches in the troubled State, now only operates five with the closures having been announced in May. FILE | PHOTO | SALATON NJAU
Equity Bank has sent home 200 of its 300 workers in South Sudan following closure of more than half of its branches in the war torn country.
The Kenya-based bank has also frozen lending in the country due to political uncertainty as a protracted civil war ground many businesses to a halt.
Equity, which had thirteen branches in the troubled State, now only operates five with the closures having been announced in May.
Earnings drop
This was revealed at an investor briefing Tuesday morning, as the lender said it had recorded a 7.4 per cent drop in half-year after-tax profit as interest income took a hit from the rate cap law.
The lender's net profit for the period to June 2017 was at Ksh9.33 billion ($90.3m) compared to Ksh10.07 ($97.5m) billion in a similar period last year.
Net interest income for the top-tier lender fell by 15.5 per cent to Ksh17.9 billion ($173.4) from Ksh21.2 billion ($205.3) in June 2016.
Equity's loan book contracted to Ksh265 billion ($2.5bn) in the period under review, compared to Ksh269 billion ($2.6bn) last year.
Non-interest income went up 19.6 per cent to Ksh12.9 billion ($125m).
"The banking industry going through a difficult environment. Interest rate caps has had effect on the economy," Group CEO James Mwangi said at the briefing.
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