Equitel’s Transaction Volumes rose 562% as Equity Bank turns Digital for Growth

3
Shares

Equity Bank has today announced its  Q1 2016 results where the bank saw its profit before tax rise 20% from Kshs. 6.1 Billion to 7.2 Billion. The firm’s profit after tax rose 19% from Kshs. 4.3 Billion to Kshs. 5.1 Billion. The company also saw its total Loan portfolio grow to Sh272 billion from Sh269 billion recorded in March 31, 2015.

The growth in the company’s loan portfolio was propelled by the growth in the company’s digital banking offerings. Total value of transactions on the digital platform stood at 177 Billion with over 200 Million transactions executed via the platform. The company’s agency banking service witnessed a 26% quarter on quarter growth in transaction numbers to 14 Million with the value of transaction via agencies rising 37% to 102 Million in the quarter. The bank’s  merchant banking saw a 45% growth to 2.2 Million transactions value at 11.1 Billion shillings. Digital banking service impacted the bank’s brick and mortar model with ATM withdrawals declining 15% to 6.6 Million transaction while value of transactions fell 6% to 47.8 Billion. Branch traffic also declined 15% with 5.5 Million transactions physical transactions taking place valued at 335 Billion.

The Communications Authority of Kenya in April released its Q2 sector statistics report for the financial year 2015/2016 (October-December 2015). The report noted the growth of Equity Bank’s Equitel platform which grew its market share by 0.8% to 3.7%. The number of subscribers grew by 29% to 1.4 Million  from 1,085,000 in the previous quarter. This growth was also seen in company’s financial results. Equity Bank reports stated it had registered 2 Million subscribers as of March 2016.

The bank announced that Equitel represented 81% of all loans issued by the bank at 2.8 Million. The bank issued loans totaling 3.4 Million. Equitel further saw a 315% quarter on quarter rise in transaction volumes to 45.6 Million from 11 Million in Q1 2015. The value of these transaction rose 562% to 62 Billion from 9.4 Billion in Q1 2015. The average loans issued via the platform stood at 42,000 up from 7,000 with the average repayment period at 4 Months. In total, transactions via mobile devices stood at  79.5 Million for the quarter. Equity Bank CEO stated he sees robust growth in their digital offering as a key driver for growth going forward and as the firm looks to deepen financial inclusion.

Shares