Kenya’s Equity Bank to Outperform Rivals in Profit

Bloomberg :Earnings per share of Equity Bank Ltd., Kenya’s biggest by customers, may grow as much as 63 percent this year, African Alliance Securities Kenya Ltd. said. Co-operative Bank of Kenya, the fourth-biggest lender by market value, may increase earnings per share by 48 percent, Kenya Commercial Bank Ltd. by 32 percent, Standard Chartered Bank Ltd. by 24 percent and Barclays Bank of Kenya Ltd. by 7.3 percent, the Nairobi-based brokerage said in a report. The forecast that Equity Bank will outperform its rivals is based on the assumption that its Uganda unit “posts no further losses in the second half and that Kenya grows its second half earnings by 15 percent,” Oliver Hoffmann, an analyst at the brokerage said in the report.

The Uganda unit had a loss of 120 million Kenyan shillings ($1.5 million) in the second quarter, down from 600 million shillings in the first, he said. Equity’s share price may rise 17 percent over the next one year to a target of 26.37 shillings, he said. Co-operative Bank’s growth will be driven by increasing deposits as much as 32 percent, reaping benefits from an expanded network and engagement of savings and credit co- operative societies as agents under the newly enacted agency banking law, Francis Mwangi, an analyst at the brokerage, said in the report. Its shares may rise 22 percent over the next 12 months to a target price of 20.40 shillings, Mwangi said. He also forecast that Kenya Commercial Bank will rise 26 percent, Standard Chartered Bank Ltd. by 14 percent and Barclays Bank of Kenya, the biggest lender by market value, by 5.5 percent.

To contact the reporter on this story: Eric Ombok in Nairobi at