Kenya’s regional bank Equity Bank’s diaspora remittance volumes hit 100 billion shillings ($979 million) in the nine months to September, helping to boost the lender’s forex trading income to 2.84 billion shillings ($19 million) during the period.
The volume grew by 28 percent compared to the same period in 2018 – when the bank handled 79.8 billion shillings ($790 million) which means that it is now on track to account for equivalent of over half the remittances coming into the country.
Equity Group CEO, Dr. James Mwangi said the lender is leveraging on its fintech partnerships to drive the volume of remittances it is handling.
The direct commissions earned from handling the remittances stood at 602 million shillings ($5.8 million), having grown by eight percent from 557 million shillings ($5.4 million) in the same period in 2018.
“Commissions are not the focus but rather the focus is access to foreign exchange. What we have seen is that when it comes to our forex dealing, we are overcompensated because 25 percent of all the forex that we deal with is coming from the remittances, giving us an assured source that is helping us become one of the biggest players in trade finance,” said Mr. Mwangi at Equity’s quarter three investor briefing in Nairobi.
Overall, Kenya’s diaspora remittance as per Central Bank of Kenya (CBK) data stood at 215.6 billion shillings ($2.1 billion) in the nine months to September 2019, an increase of 4.4 Percent from the same period in 2018.
CBK Governor Patrick Njoroge has in the past attributed the growth in remittances to better transmission channels as more banks make use of fintech to facilitate the inward movement of the cash.
Equity reported a 12 percent growth in the net profit to 17.46 billion shillings ($166 million) in the nine months to September, helped by higher interest and non-interest income.
Equity Bank has branches in Rwanda, South Sudan, Tanzania, Uganda and DRC.
JK/as/APA