NAIROBI, July 20 (Reuters) – Kenya’s Equity Bank (EQTY.NR) posted a 46 percent rise in first-half pretax profit on Tuesday and its chief executive forecast earnings would rise further on easing costs and economic growth in the region.
Equity, which has operations in neighbouring Uganda and Sudan, said profit rose to 3.88 billion shillings ($47.65 million) during the first six months of the year.
Depositors jumped by 400,000 to nearly five million, mainly due to a new mobile phone service called M-Kesho, run jointly with Kenya’s biggest mobile operator Safaricom (SCOM.NR), which allows users to access credit, earn interest on deposits and buy insurance. [ID:nLDE64H1DF].
Equity’s CEO James Mwangi told investors the bank’s recent expansion costs had started to taper off and combined with better economic growth prospects in the region this signalled further profit gains.
“The profitability of the bank is likely to accelerate because of costs. Most of the costs are now fixed,” Mwangi said.
Equity’s loan book expanded by just over a quarter during the period while bad debt provisions rose 211 percent to 920 million shillings to clean out the threat of defaults, Mwangi said. (Editing by James Macharia)