Subsidiaries of the Equity Bank Group are reaping big returns analysts say.
According to the bank group, its subsidiaries have increased their profit before tax contribution to 19% from 14% even as other banks have kept off some of the markets.
While other institutions saw their profits fall or stagnate, Equity Bank Group has seen increase in its total net profit.
“Equity Group has proven that the business model it encompassed post rate cap is effective in comparison to its peers,” said the Nairobi based Standard Investment Bank (SIB) in the latest analysis of the lender’s financials.
In reference to 2017, for example, the geographical and diversification strategy has resulted in it telco, Equitel’s profitability growing by 204%, Equity Bank South Sudan (291%), Equity Investment Bank (481%), Tanzania (68%), DR Congo (78%), Rwanda (58%) and Uganda rise 28%.
In an analysis earlier in the year, Rencap had advised that African banks such as Equity and KCB should concentrate on strengthening subsidiaries in East Africa and go slow outside the five members of the East Africa Community (EAC).