James Mwangi, Equity Bank CEO

Equity Bank’s digital transactions make up 98 percent of all transactions, driving the lender’s revenues for the first three months of the year, according to insights shared by the bank during its quarter one (Q1) investor briefing on Wednesday.

According to the lender digital transactions grew by 23.3 percent to Sh2.2 trillion from Sh1.8 trillion last year, while digital payments grew by 171 percent to Sh54.2 billion from Sh20 billion.

Equity Bank’s CEO James Mwangi cited the Covid-19 pandemic as a key catalyst for digital transaction adoption.

“We emerged out of the three-year pandemic period as a strong digital business. The digital capabilities of the Group continued to be strengthened by the successful rollout of the interoperable universal digital payments platform,” Mwangi said.

Kenya becoming a cashless society: mobile banking transactions set to soar

Mobile and Internet banking transactions grew by 270 percent to 1.3 billion transactions up from 361.6 million.

Pay with Equity (PwE’s) transactions volume grew by 243 percent to 48.3 million transactions up from 14.1 million.

As a result, the lender’s transaction income for the period under review grew by 73 percent to Sh.4.1 billion up from Sh2.3 billion.

70 per cent of the online transactions were transacted from  self-service platforms while 96 per cent happened on third-party and self-service platforms.

The lender further announced that 87 percent of all loans are being processed on mobile channels and 82 percent of all transactions are cashless.

Equity Bank recorded an eight percent increase in profit after tax to Sh12.8 billion under the review period from Sh11.9 billion reported in the same period last year.

The profitability was attributed to the growth in non-funded income, one of its diversification strategies, which grew by 57 percent to Sh18 billion from Sh11.5 billion.

Kenya’s business contributed 53 percent of the net profits while regional and non-banking subsidiaries contributed 47 percent.

“We have become a truly regional and diversified business. Our regional expansion and product diversification strategy has delivered an almost half split of business between the anchor Kenya business and the regional banking subsidiaries and non-banking business,” Mwangi said.

The Group registered a 21 percent growth in general business with the total assets reaching Sh1.53 trillion as of March 31.

Funding the asset growth is a 23 percent growth in customer deposits with the proceeds deployed to grow the loan book by 21 percent.

Customer deposits grew to Sh1.1 trillion up from Sh900.9 billion while the loan book grew to Sh756.3 billion up from Sh623.6 billion.