Equity Bank – Kisumu Supreme Branch, is one of the Bank’s Supreme branches situated in major towns in Kenya offering personalized banking services to many SMEs and Large Corporates
Nairobi, Thursday 13th July, 2017….. Equity Bank Kenya has been assigned first-time ratings by Moody’s Investors Service. The outlook is stable based on the Bank’s strength. The global local currency rating captures the Bank’s strong credit profile. This is closely aligned with the B1 (stable) rating of the Kenyan government. At the same time, Moody’s has assigned a national scale rating of Aa1. This ranks Equity Bank Kenya as the best credit-rated bank in Kenya.
Equity Bank has been rated by Moody’s Investors Service as having strong brand recognition and an established domestic franchise. Its extensive use of digital and alternative distribution channels supports high and resilient profitability. The Bank also has solid liquidity buffers and a resilient funding profile. This is supported by its retail funded depositor base. As of March 2017, Equity Bank was the most profitable bank per the published financial results.
Commenting on the achievement, Equity Group Holding CEO & MD, Dr. James Mwangi said that the ratings reflect on the Bank’s strong market position within the regional banking space making it well positioned to take advantage of positive growth, infrastructure and other developments within the local economy.
“As the Bank enters the next phase of growth, there is a renewed need to mobilize funds to finance major infrastructural developments. This includes local and regional SMEs. This is bolstered by the fact that we have continued to reinforce our corporate product offering. Our management team and IT reliability and capacity are enhanced to improve customer service. This offers a more complete product suite to cross-sell to existing and new customers in Kenya and the region,” Dr. Mwangi said.
Moody’s expects that Equity Bank’s profitability metrics will remain strong. This is supported by its low-cost funding, increasing non-interest income, and an efficient cost structure. The extensive use of digital and alternative distribution channels contributes significantly. The Bank’s net income to average assets stood at 4.3% during the first quarter of 2017. Moreover, its pre-provision income to average assets was at 6.7%, both amongst the highest in Kenya’s banking system.
“The rating reflects the Bank’s intrinsic credit strength, significant market size, acceptable risk management practices, and profitable business model. It also reflects prudent capital levels and support from its shareholders. We continue to protect against slow business volumes by focusing on high margin plays and cutting operational and funding costs,” Dr. Mwangi added.
With Equity Bank experiencing strong deposit growth over the past 15 months, along with lower loan balances, the Bank’s liquidity ratios have improved significantly. As of March 2017, liquid assets were at a strong 39% of total banking assets. Meanwhile, net loans were at a fairly low 72% of customer deposits.
The Bank recently rolled out its new set of digital products dubbed ‘EazzyBanking’. These products provide customers with a convenient, comprehensive, and secure banking experience. This aligns with the customers’ evolving banking trends. These trends increasingly embrace self-service technology platforms that provide freedom, choice, and control.
As of March 2017, EazzyBanking App transactions grew by 28%. EazzyBiz, a cash and liquidity management system for SMEs and Corporates, grew by 56%. Similarly, EazzyNet, an online platform for retail and individuals, increased by 32%. EazzyPay, an interoperable payment system, expanded by 171%. Additionally Equitel has taken up 23% of the mobile money transfer market share (Q3 CA Report Jan- March 2017).
Equity Bank remains well-positioned to respond to emerging opportunities. The focus is mainly on SMEs, particularly in the energy, infrastructure, and export sectors. As of 31st March 2017 financial results, 72% of the loan book was allocated to SMEs and Large Enterprises.
Equity Bank Kenya caters to SMEs and large corporates through its Supreme Banking offering. This includes branches in key locations such as Nairobi’s Upperhill, Gigiri, Lavington, and Kilimani. Other locations include Kisumu, Mombasa, Nakuru, Eldoret, among many other major towns in Kenya.
