I&M Group PLC has recorded KES 11.6 billion in profit after tax for the full year ending December 2022; a 34% increase in profitability from KES 8.6 billion reported during a similar period in 2021.

The Tier 1 Bank attributed this impressive growth to the continuing successful implementation of 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.

As a result of the strong performance, the Board has proposed a total dividend of KES 2.25 per share, a 50 % increase from last year, bringing the total dividend payout to KES 3.7 billion and a dividend yield of 13%.

Key Financial Performance

During the period under review, the Group’s balance sheet and income metrics improved on the backdrop of strong liquidity and a solid capital base.

Balance sheet highlights

• The Group’s balance sheet grew steadily with total assets growing to KES 436.6 billion up from KES 415.2 billion. This was supported by a 13% growth in the loan book which increased to KES 239 billion. The new retail lines showed promising growth.
• Customer deposits closed at KES 312.3 billion, a 5% increase year on year, largely driven by the growth in deposits from relaunched customer value propositions and enhanced usage of digital channels.

Income statement highlights

• Net Interest Income for the period under review recorded a growth of 10% to close at KES 23 billion from KES 21 billion in the prior year, on account of strong growth in the loan portfolio and earnings from Government Securities.
• Non-Interest Income increased by 46 % to KES 12.7 billion from KES 8.7 billion  in the prior year. This was driven by growth in fees and commissions and foreign exchange income.
• Loan loss provisions increased by 25% compared to the previous year reflecting the continued pressure in performance for some sectors as well as loan book growth. The Group’s operating expenses stood at KES 16.1 billion, an increase of 19% year on year on account of completed and new capital investments supporting automation and the digital strategy.

Commenting on the results, Mr. Daniel Ndonye, Chairman, I&M Group PLC, noted:

“The strong results posted in 2022 demonstrate that we are making good progress on our strategic plan to be Eastern Africa’s leading financial partner for growth. Looking ahead, we remain committed to driving sustainable growth, on delivering value to our customers and ultimately creating long-term value for our stakeholders.” I&M Bank Kenya

I&M Bank Kenya posted 39% increase in profit after tax for the period in review. Additionally, the Bank saw significant growth in the adoption of its digital services, with 93% of customers initiating their transactions through digital channels.

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As part of the Group’s strategic move into the MSME space in Kenya, the Bank has been leveraging on strategic partnerships with anchor clients to enhance their business efficiencies and improve access to working capital for their distributors.

The Bank made significant progress on its commitment to its Environmental, Social and Governance (ESG) initiatives. The Bank saw a 42% uptake of its KES 6 billion Renewable Energy Funding Scheme dubbed “The I&M Green Energy Fund” set aside to finance clean energy projects for customers to move to more environmentally friendly energy solutions.

Regional Growth

The Group’s regional subsidiaries continued to grow, contributing 13% to the overall banking profitability.

I&M Bank Rwanda reported a 22% increase in profit before tax for the period in review. The Bank’s strong performance was driven by increased economic activity, with loans and deposits growing by 4% and 10% respectively, which led to growth in Net Interest Income and Net Fee Income.

The subsidiary grew its digital services adoption with 80% of all customers initiating transactions in the Bank through their digital channels.

Additionally, I&M Bank Rwanda recently inaugurated its iconic green headquarters building located in the heart of Kigali. The 3,540sqm building dubbed Nine on The Avenue is part of the Bank’s commitment to support the Rwandan Government’s strong dedication and commitment towards promoting and enabling sustainable urbanisation.

I&M Bank Tanzania recorded a loss before tax of KES 688.7 million compared to a profit before tax of KES 492.4 million the previous year. The performance was driven by an increase in loan loss provisions as per Bank Of Tanzania (BOT) regulatory requirements. Total assets grew by 10% to close at KES 31.6 billion from 28.8 billion in 2021.

I&M Bank Tanzania grew its digital services adoption with 40% of all customers initiating transactions in the Bank through their digital channels.

I&M Bank Uganda recorded a profit before tax of KES 691.6 million compared to a loss before tax of KES 1.1 billion in 2021. This was aided by an increase in operating income which grew by 9%, reduced loan loss provisions and recoveries during the year. The balance sheet reported a 16% year on year growth to close at KES 26.2 billion.  This was an impressive growth from the Uganda subsidiary which completed its first full year as part of the I&M Group, with the team focused on integrating the subsidiary to align to the Group’s strategy and values.

The Group’s Joint Venture in Mauritius, Bank One, recorded a profit after tax growth of 21% year on year driven by a reduction in loan loss provisions, an increase in recoveries and Net Interest Income growth of 22%, supported by the improving economic climate in Mauritius.

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As part of growing and leveraging the synergies amongst its regional subsidiaries, I&M Group relaunched BRISK, a service that enables its customers to transact seamlessly in Kenya, Rwanda and Tanzania through a single account thus improving interdependencies between the subsidiaries. Plans are underway to extend the product to Uganda and Mauritius.

Outlook for 2023

The Group’s Executive Director, Mr. Sarit Raja-Shah is positive about the Group’s performance in 2023 on the back of its robust iMara 2.0 strategy.

“Our key areas of emphasis will continue to be enhancement of service delivery for our customers as well as building a resilient profitable business. We believe we have a sound strategy that will drive the business to the next level of growth and development,” said Mr. Shah.

“Looking ahead, we will continue to support our customers through this uncertain economic period, while investing in a simpler and better banking experience. Our iMara 2.0 strategy has equipped us to deliver sustainable growth in all our business segments and returns to shareholders in the years ahead,” he added.