April 23 (Bloomberg) -- Equity Bank Ltd., Kenya’s second-biggest lender by market value, surged to its highest since November after earnings rose and the company was given a license to expand into mobile-phone operations.
The shares rallied 3.7 percent to 35.25 shillings by the 3 p.m. close in the capital, Nairobi. More than 10.5 million shares were traded, or about 4.2 times the three-month daily average volume.
Equity Bank’s profit in the three months to March advanced to 3.88 billion shillings ($44.5 million) from 3.21 billion shillings, the company said April 17. A week earlier, the Communications Authority of Kenya gave Equity Bank’s Finserve Africa Ltd. unit a license to operate a mobile virtual network, using the infrastructure of an existing phone company.
The stock’s rally “is feeding from the first-quarter earnings,” Rufus Mwanyasi, head trader at Nairobi-based Canaan Capital Ltd., said by phone. “Telecommunications opens a whole new revenue stream for the bank.”
Equity Bank plans to double the number of African nations it operates in to 10 over the next decade, Chief Executive Officer James Mwangi said in an interview April 17. The expansion plans “will be a factor in improving their income,” Kuria Kamau, an analyst at Kestrel Capital (East Africa) Ltd., said by phone.
The shares climbed 14.6 percent this year, compared with a 8 percent increase in the FTSE NSE Kenya 25 Index.
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