During the height of the political crisis, some politicians had urged their supporters to boycott Equity Bank but despite the calls, the banks pre-tax profit for the year ended 31 December 2007 grew to KSH2.4bn up from KSH1.1bn the previous year representing a 116% increase amid a massive asset growth of 166%.
The 166% asset growth was funded by a massive capital injection of KSH11bn and funding restructuring driven by long-term subordinated debt and growth in customer deposits.
“This massive increase in profitability is mainly due to sustained business growth strategy amidst a well performing and growing economy and matched by major improvements in asset quality and operating efficiency,” said James Mwangi the bank's chief executive officer.
Total operating income grew by 73% to KSH5.8bn up from 3.4bn the previous year.
Total operating expenses grew at a lower rate of 52% to KSH3.5bn up from 2.3bn the previous year. The growth in expenses was mainly driven by the banks expansion strategy that saw 28 new branches opened during the year to bring the total network to 70 branches countrywide. An additional 150 ATMs were purchased to create the country's largest network of 350.
The sustained impressive growth of Equity Bank over a period of three years since converting into a commercial bank confirms the strength, suitability and sustainability of its unique financial inclusive business model. The adoption of modern computer technology, rapid growth, listing on the Nairobi Stock Exchange has rewarded the bank with impressive efficiency, massive growth in business and reduced effective corporate tax rate.
The bank's exceptional growth and performance has been recognised both locally and internationally during the year. It was voted the best bank in Kenya by Euro Money Award for Excellence 2007, conferment of 2007 Global Vision Award in microfinance, scooping 38% of all bank awards in the 2007 Kenya Bank Survey Awards, being a case study at Stanford and Harvard Business Schools, appointment of the bank's CEO as a member of the UN advisor on Inclusive Financial Systems and conferment of two Honorary Doctorate degrees to the chief executive.
