Equity Group CEO James Mwangi
Equity Bank has sent home 200 of its 300 workers in South Sudan following closure of more than half of its branches in the troubled country.
The Kenya-based bank has also frozen lending in the country due to political uncertainty as a protracted civil war brought many businesses in South Sudan to a halt.
Equity, which had thirteen branches in the troubled country, now only operates five with the closures having been announced in May.
Earnings Drop
This was revealed at an investor briefing Tuesday morning, as the lender said it had recorded a 7.4 per cent drop in half-year after-tax profit as interest income took a hit from the rate cap law.
The lender’s net profit for the period to June 2017 was at KSh9.33 billion compared to 10.07 billion in a similar period last year.
Net interest income for the top-tier lender fell by 15.5 per cent to KSh17.9 billion from KSh21.2 billion in June 2016.
Equity’s loan book contracted to KSh265 billion in the period under review, compared to KSh269 billion last year.
Non-interest income went up 19.6 per cent to Sh12.9 billion.
“The banking industry going through a difficult environment. Interest rate caps has had effect on the economy,” Group CEO James Mwangi said at the briefing.
– Business Daily
The way Equity bank laid off the South Sudanese staff in July 1st 2016 was unfair. Non of the staff was informed about the decision made by the board. The benefits that the employee has made all that long was not multiplied by the devaluation rate of SSP against the US dollars imposed by the government of South Sudan in December 2013 and most of the staff got the employment 5 years before the devaluation of South Sudanese pounds against the US dollars.
The rest of banks here do inform the public and their staff through all sorts of media about the downsize due to economic crisis being undergone but Equity bank doesn’t do that.