I&M Group PLC increased its operating income by 23% to KES 19.1 billion in the first half of 2023, up from KES 15.6 billion in the same period in 2022. The active income was boosted by growth in both corporate and retail segments (29% and 28% year-on-year growth, respectively) as it saw its diversification strategy yield fruit.
The Tier 1 Bank recorded substantial operating revenues across its markets, with regional businesses contributing 27%.
The Group continues to successfully execute its iMara 2.0 strategy, which is now in its 3rd and final year, focusing on business growth, operational efficiencies, customer centricity and digital transformation.
Key Financial Performance Highlights
Balance sheet highlights
The Group’s balance sheet grew steadily, with total assets crossing the KES 500 Billion mark, increasing by 17% over the same period in 2022.
The loan portfolio grew by 17% to reach KES 270 billion, partly attributable to retail lending through the Group’s digital platforms despite the challenging macroeconomic conditions across most of its markets.
Customer deposits closed at KES 357 billion, a 14% increase year on year, as the Group continued focusing on product innovation and digitization.
The Net Non-Performing Loans stood at KES 10 billion, reflecting the challenging macroeconomic environment.
Income statement highlights
The Group’s operating income recorded a strong growth of 23%. The overall profit declined marginally by 2% to KES 7.0 billion because of increased loan loss provisions, as the Group maintained prudence.
Growth in operating income was driven by an increase of 16% in Net Interest Income and 37% in Non-Interest Income for the period under review.
The Group’s operating expenses, excluding loan loss provisions, stood at KES 9.3 billion, an increase of 28% yearly driven by continued investment in technology and people across all jurisdictions.
Commenting on the results, Mr Sarit Raja-Shah, Group Executive Director, I&M Group PLC, noted:
“The Group has ensured adequate funding and sufficient capital buffers to uphold the present growth momentum as we impact customers meaningfully. The rise in the Non-Performing loan book and provisions reflects our cautious approach to portfolio management amid a challenging business environment. As we progress, the Group emphasises expanding our portfolio and enabling our customers to achieve their business goals”. I&M Bank Kenya
I&M Bank Kenya posted an operating income growth of 20% yearly, a 17% increase in operating profit and a 6% decline in profit before tax due to higher loan loss provisions.
The successful implementation of the iMara 2.0 strategy resulted in growth in deposits, primarily Current and Savings Accounts, Customer assets and New-to-Bank relationships. Additionally, through relevant product innovation and marketing, the Bank has registered significant growth in brand awareness from 5% to 20% during the first half of the year.
I&M Bank Rolls Out the Largest Unsecured Personal Loan Limit in Kenya
As part of the strategy, the Bank has also seen significant growth in adopting its digital services, with 93.5% of customers initiating their transactions through digital channels. This led to the Bank being recognized by Finnovex East Africa for Excellence in Mobile Banking at the prestigious awards.
Commenting on I&M Bank Kenya’s performance, I&M Bank’s CEO, Mr Gul Khan, said:
“In the first half of the year, our focus centred on providing relevant financial solutions designed for Kenyans. This included waiving of Bank to mobile wallet charges with the Ni Sare Kabisa campaign to cushion Kenyans against the high cost of living, the Unsecured Personal Loan of up to KES 10 million, Digital Unsecured Lending for personal customers and small businesses and Stock Financing. We take pride in our customer-centricity and plan to roll out several new branches over the next couple of months as we seek to move our financial services closer to our customers,” Said, Mr Khan. Regional growth
Regional subsidiaries of the Group continued to grow steadily, with operating income contribution increasing to 27% from 25% in 2022. For the period ending 30th June 2023, 78.4% of I&M Group customers across the region were digitally active.
I&M Rwanda reported a 15% increase in operating income for the period under review. The Bank’s strong performance was driven by increased economic activity in the region, with loans and deposits growing by 9% and 11%, respectively, which led to growth in net interest income and non-funded income.
In Tanzania, I&M recorded a 56% increase in operating income to close at KES 1.4 billion and a 108% increase in operating profit due to strong growth in total assets of 24%. Asset growth was supported by loan growth of 19%, while deposits increased by 22%.
I&M Uganda posted strong growth in operating income of 42% and an operating profit of 117% as it continues integrating into the Group. Total assets reported a 28% year-on-year growth to close at KES 33 billion, with growth in the loan and deposit book at 42% and 13%, respectively.
The Group’s Joint Venture investment in Mauritius, Bank One, recorded a growth of 51% in operating income year on year, driven by the development of the loan portfolio and higher Non-Interest Income.
Group Strategy & Outlook for 2023
I&M Group is in the final year of its iMara 2.0 strategy, which has been focused on enhancing its corporate strength while scaling up diversification into retail through an enhanced customer value proposition and building requisite capabilities.
Speaking on the Group’s half-year 2023 performance, the Group’s Regional CEO, Mr. Kihara Maina, was optimistic about the Group’s forecast for the second half of 2023 regarding a robust Group adoption of the iMara 2.0 strategy.
“As we complete the final year of our iMara 2.0 strategy, we remain confident in our progress in further steering I&M Group as Eastern Africa’s leading financial partner for growth. We shall continue investing in rolling out solutions that meet our customers’ needs. In line with this, plans are ongoing to roll out an end-to-end Trade Finance platform and a Bancassurance system,” Said Mr. Maina.
I&M Bank Group recently joined the United Nations Global Compact (UNGC), reaffirming its dedication to its sustainability initiatives. This significant step aligns with the Group’s iMara 2.0 strategy to embrace sustainability and the UN Sustainable Development Goals (SDGs), aiming to establish a resilient business across its subsidiaries.
I&M Group has undertaken various initiatives to reduce its carbon footprint, ensuring sustainability remains at its operations’ core. The Group emphasises environmental responsibility, taking a proactive approach to identifying opportunities to achieve net-zero impact. This includes focusing on digital banking, transitioning to green energy, green financing products, and green buildings. Rwanda’s recently inaugurated green headquarters is the lender’s second green building after 1 Park Avenue in Nairobi.
