Equity Bank Group named Strongest Banking Brand in Kenya

The Equity Bank Group brand is worth Ksh 69 billion (US$531.7 million) and is Kenya’s strongest banking label, according to Brand Finance
Banking 500 2023 report.

The report also placed the local lender, which posted a record high of Ksh 46.1 billion in profit after tax for the financial year ending 31
December 2022 as the world’s fourth strongest brand in banking.

The profit marked a 15 % increase from the Ksh 40.1 billion (USD 300,599,697.18) earned the previous year.

The brand of South Africa’s oldest lender, First National Bank (FNB) was declared the world’s strongest with a brand value of (USD 1.5 billion).

In the top ten global brands the Kenya Commercial Bank Group, the country’s second-biggest bank by assets was the only other Kenyan
the lender on the list, emerging as the sixth world’s strongest brand with a brand value of (US$380 million).

Brand Finance defines brand value as the present value of earnings related to brand reputation. Organizations own and control these earnings by owning trademark rights.

“A strong brand can lead to improved business returns in several ways. First, a strong brand can help a company differentiate itself from its competitors and establish a unique identity in the market, which can lead to increased customer loyalty and retention. This, in turn, can
lead to higher sales and revenue. A strong brand can also help a company command a higher price for its products or services, as consumers are willing to pay more for a brand they perceive as high-quality and trustworthy,” says Brand Finance.

Equity’s earnings meanwhile were driven largely by a 27% growth in interest income of Ksh.119.6 billion( US $ 896,215,806.72)

According to the Bank, geographical expansion and business diversification continued to strengthen the resilience and risk mitigation of the Group.

The dominant performance of the Kenyan banking business continued to decline with other subsidiaries showing great improvement.

With its strong efficiency, economies of scale, and maturity, Kenya contributed to 70% or Ksh 33.4 billion of the Profit After Tax, leaving the subsidiaries to contribute Ksh 14.7 billion of net profit.

The time it takes for a subsidiary to reach a 4% Return on Assets has reduced from 16 years to 12 years and may reduce further as the region consolidates as the fastest-growing region in the world, says Mwangi.

“Our Kenyan businesses contributed to 30 % of the entire profit because it is a mature business and a very efficient business,” said Equity Group CEO James Mwangi. “DRC has become our second largest subsidiary after Kenya and given that the operation in DRC is dollars we can then see that the balance sheet has had an effect on the Group‘s financials.”

Besides Kenya, the bank has a footprint in Uganda, South Sudan, Rwanda, Tanzania, DRC, and a Commercial Representative Office in Ethiopia.