Lemme interject:
Interest income
KCB - 39.2bn +3.3bn
Equity - 34.1bn +4.9bn

Non interest income
KCB - 19.78bn +0.55bn
Equity - 21.9bn +3.4bn

Total income
KCB - 59.02bn +3.84bn
Equity - 56.1bn +8.bn

Costs are equal at 32bn
KCB had a tax credit this year, Equity last year had a capital gain from sale of HF shares which was a one off. Equity had a significant one off IT cost this year.
If you want higher numbers go for KCB, if you want higher diversified growth go for Equity.I think growing non-interest income is much important than the volatile interest income

One more thing, Equitel contributes in interest income...an average of 1.5bn loans issued every month. Average interest rate is 5% so almost 1bn in interest income in 12 months assuming flat growth

To add to @watesh - Equitel has REDUCED the cost of transactions by reducing the need for branches [660 staff have left], ATMs and agents.

In a (past) presentation, JM said the cost increases from mobile/internet to agents to ATMs to branches.

Branches will become Sales Points not 'transaction' points.

Equitel is going to add services to the menu. Plus expansion within new markets e.g. DRC will be driven by mobile banking. He said Equitel transactions were up 1,000% and can only grow in number & value thus reducing the need for (expensive fixed-cost) branches.

If his presentation is online, watch it. JM is a man on a mission!

2-3 years ago, Mwangi made a presentation where he lambasted Safaricom for charging an arm & a leg for USSD. Some @Wazuan argued with me that a transaction cannot cost 100/- [I did a series a transactions & was charged about 100/-] and I have stopped arguing with folks who insist they are right when I know what I paid.

Anyway, since then Equity went with Airtel and pays Airtel "per use" at a much lower rate. So yes, it seems Equity does subsidize Equitel but that's not a bad thing as it lowers costs of transactions for both customers [loyalty] and Equity [which can push volumes & new business].

The bigger picture is using Equitel to expand into EAC. Compare the profitability of Equity's subsidiaries vs KCB.

He still pays Safaricom because there are die hard Mpesa users who dont want anything to do with the thin sim.

Curious tho, he did not mention the success rate of loan repayment.

Those who use M-Pesa are charged, as I understand it, but its free for Equitel users. NPLs at less than 4% for 2015 and expected to be less than 3% in 2016 is what he said for 2016.

For HFCK not bad. But the difference between KCB and Equity is significant.

Book Closure 18-Mar-2016. Payment 29-Apr-2016

Yesterday i went to an equity branch to transact over the counter. The queue was long. One of the managers came and to my satisfaction he really educated/lectured queuing customers. There were only 2 tellers and he promised soon it'll be 1 teller. He emphasized on them adopting technology and encouraged use of Equitel,ATM,Agents in transacting to save time and De-congest banking halls. He was mad at the youths who say are digital yet queuing.Further he justified the three to be cost efficient. He asked one customer where he had come from,the manager then calculated for him fare paid to and fro and the time wasted to come and deposit 2k only yet the same would have been done at the nearest agent. Civil education is important. Equity employees you better begin thinking of becoming an agent!

Having previously worked in a banking Hall i understand their plight. As much is its true that "if you don't accept change ,then the same change will change you" , I feel for them.

The change is coming and they have to adopt the change . These are employees that have been lured to "bank employee products" like mortgage at 4% , personally loan ,car loans and all these incentives at that rate .Then ask the question ,what are they going to do after they are regarded as redundant ?who will they pay for their houses , what will be the social stigma after they are jobless?

Equity should put a human face and find something to do for these employees but the sad thing is that they can't absorb all of them to different departments . Even the same manager who talked to you its a matter of time till when she will lose her job too.start with the small fish then work your way up to the big one . She should also start thinking otherwise too.

Employees cost is what eats the PBT AND PAT Of banks books. If they can find a way to minimize the two then Memba bank will be the in thing in banking sector in kenya . That Mwangi guy is a very talented leader .for me I'll keep adding my stake in this stock. They are constantly innovative , moving , motongorias (leaders ) .

They need to reskill themselves