Equity Bank Group’s net profit for the six months to June rose by 16 per cent despite a slowdown in the performance of its regional subsidiaries.
The bank reported a profit of Sh6.3 billion for the half-year period, up from the Sh5.4 billion realised in the same period last year, boosted by impressive growth in the Kenyan outfit.
Addressing investors in Nairobi on Monday, chief executive officer James Mwangi attributed the growth to a decline in interest expenses which dropped 31.7 per cent to Sh1.7 billion while net interest income went up by about 17 per cent to Sh13.3 billion year on year.
Performance from the regional subsidiaries, however, declined to 8 per cent of total earnings compared to 12 per cent in the first quarter.
This has been attributed to the disruption of oil flow in South Sudan in the last one and a half years and the suspension of donor aid to Uganda and Rwanda on allegations of mismanagement and corruption.
“Slow growth in regional operations was impacted by uncertainty in South Sudan as a result of termination of oil exportation and the suspension of donor budgetary to Uganda and Rwanda,” Mr Mwangi said.
With more than 8 million accounts, the bank has operations in Uganda, Tanzania, South Sudan and Rwanda.
The Kenyan operations recorded a 21 per cent growth in the period under review, further putting into focus the bank’s strategy in the regional markets where its model of targeting the low income segment of the market seemed not to have worked the way it has in Kenya.
A Citi research released in October last year said the bank has had a poor track record in its East African operations where it had injected Sh7.9 billion in investments since 2008 but is yet to realise significant returns.
