Equity Bank Gains Most in Month on Profit Outlook: Nairobi Mover

Equity Bank Ltd., Kenya’s biggest lender by market value, climbed the most in more than a month after AIB Capital Ltd. raised its price estimate for the stock, citing a strong outlook for earnings.

The stock advanced 2.4 percent to 32.25 shillings by the close in the capital, Nairobi, the largest gain since May 16. Trading volume was almost double the three-month average. AIB raised Equity Bank’s price estimate by 39 percent to 38.43 shillings, maintaining its buy rating on the shares.

Equity Bank, which operates in Kenya, Uganda, Tanzania, Rwanda and South Sudan, last month posted a 22 percent increase in first-quarter profit to 3.21 billion shillings ($37 million). The Nairobi-based lender said on June 6 it restructured operations and promoted John Staley to chief officer in charge of finance, innovation and technology.

“We expect the growth in earnings over the next five years to be achieved mainly through efficiency gains through continued roll out of tech-centric product suites and the graduation of its small business customers,” AIB analyst Ted Macharia said in an e-mailed note dated yesterday.

Equity Bank’s full-year profit will probably increase 15 percent to 13.9 billion shillings, according to the mean estimate of seven analysts surveyed by Bloomberg. The lender’s shares have rallied 36 percent in 2013, outpacing an advance of 25 percent for the Nairobi Securities Exchange All Share Index.

Five analysts excluding Macharia recommend investors buy the stock, while four have a hold rating and one says sell, according to data compiled by Bloomberg.