Equity Bank - Results show Kenya is still interesting

Kenya's regional banking champion, Equity Bank, once again announced an impressive set of first quarter results. An 80.5% increase in pre tax profits and a 9.2% increase on last quarter (the period covering the riots!). This improvement was driven by growing interest and non funded income as well as cost efficiencies (operating expenses increased by only 5.9%). The bank, like others in Kenya, has increased loan loss provisions arising from the post elections violence. As a results, pre-tax profits 'only' grew to 9.2%. One downside is than government securities accounted for a significant portion of the total operating income and this trade is over going forward. That said, in the short term this will be more than compensated by lending due on the back of the Safaricom IPO.