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Equity Bank of Kenya Nine-Month Profit Climbs 14% on Loans

Nov. 6 (Bloomberg) -- Equity Bank Ltd., Kenya’s biggest lender by market value and customers, said nine-month profit climbed 14 percent as loans increased.

Net income rose to 8.3 billion shillings ($97.6 million) in the period to Sept. 30, from 7.29 billion shillings a year earlier, Chief Executive Officer James Mwangi said in Nairobi today. Net interest income, the amount banks earn from charges on loans, surged 55 percent to 17.2 billion shillings, he said.

Kenyan lenders have benefited from record high interest rates after the central bank raised its benchmark lending rate to 18 percent in December to quell surging inflation and bolster the shilling. The central bank has cut the rate twice since July to 13 percent and is expected to announce a further reduction tomorrow, according to six economists surveyed by Bloomberg.

Equity’s customers in the nine months to September increased to 7.8 million, or 51 percent of all bank customers in Kenya, from 6.7 million a year earlier.

Standard Investment Bank has a hold rating on Equity Bank with a price target of 24.8 shillings, Head of Research, Francis Mwangi said today by telephone.

The stock gained for a second day, trading 2.1 percent higher at 24.50 shillings at 12:50 p.m. in Nairobi. Year to date the stock has rallied 51 percent, outpacing a 34.4 percent rally on the NSE All-Share Index, according to data compiled by Bloomberg.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net

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