I&M Group PLC has continued its growth momentum into the third quarter of 2022, with the Group reporting strong double-digit growth of 29% in profit before tax to Kes 10.4 billion compared to Kes 8.1 billion in the same period in 2021.
Key Financial Performance
During the period under review, the Group’s balance sheet and income metrics improved on the backdrop of continued strong liquidity and a solid capital base.
Balance sheet highlights
- The Group’s balance sheet grew steadily with total assets growing by 7% to Kes 429 billion up from Kes 399 billion. Of the Kes 30 billion increase in total assets, Kes 22 billion was from loan book growth.
- Loans and advances grew by 11% to Kes 231 billion whilst investment in securities remained flat at Kes 114 billion.
- The net non-performing loans decreased by 13% year on year to Kes 5.8 billion on the back of an expanded loan book and recoveries.
- Customer deposits closed at Kes 308 billion, a 7% increase year on year.
Income statement highlights
- Net interest income for the period under review recorded a growth of 16% to close at Kes 16.2 billion on account of improved yields on loans and advances, as well as from government securities.
- The strong growth in non-interest income was driven by a 26% increase in fees and commissions income and improved foreign exchange trading income
Commenting on the results, Mr. Daniel Ndonye, Chairman, I&M Group PLC, noted:
“The growth during this period was underpinned by the Group’s strategy, with continued customer acquisition driving transactions, deposit growth, and growth in digital solutions. The performance further demonstrates the Group’s resilience amidst a period of heightened risk in the global environment.”
Mr. Ndonye added:
“Our key focus going forward is to continue implementing our robust iMara 2.0 strategy, which has positioned us well for future growth despite the challenges impacting the operating environment. We aim to continue growing our Non-Funded Income portfolio and boost our revenues by increasing our base of digitally active customers.”
Market Driven Solutions
During the period under review, I&M Bank, Kenya launched an enhanced set of tailor-made financial solutions to serve the financial needs of each customer. This includes the Bank’s enhanced service delivery promise dubbed Service Guarantee.
The initiative serves as the Bank’s commitment towards service excellence through a well-defined compensation structure for any service failures on specific transfers done via I&M’s mobile and web platforms.
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Further, I&M Bank Kenya is extending its strategic partnerships to support its customers’ financial needs. These include the launch of the stock financing solution for MSMEs in the form of an unsecured loan for supply chain customers. This solution will allow customers to access quick and convenient working capital when they process orders with the Bank’s partners.
Additionally, I&M Bank Kenya signed a Credit Risk Guarantee solution “NASIRA” for USD 15 million with FMO, the Dutch Entrepreneurial Development Bank, for its existing customers. The facility will be used for I&M’s MSME portfolio, as it aims to expand its outreach to this customer segment.
The Agreement includes financial literacy sessions aimed at capacity building for MSMEs conducted in conjunction with FMO and the International Finance Corporation (IFC).
In Rwanda, the subsidiary conducted similar outreach programs, aimed at growing its penetration in the MSME sector. Through its initiative, Ganza and I&M, the Bank supported MSMEs with capital injection for their products and financial advisory services. During the period under review, the Bank’s MSMEs customer base grew by 46%.
In Tanzania, I&M rolled out the Bancassurance offering to create a one-stop shop for all financial solutions for their clients.
I&M Bank Uganda set up its first I&M Select branch that targets High Net Worth Individuals and Corporates. Adjacent to this, it has set up a “Digital Pod” that allows customers to conduct certain banking transactions without having to enter the Branch.
Regional growth
The Group’s regional subsidiaries posted double-digit growth year after year.
Kenya posted a 30% increase in profit after tax for the period in review. Additionally, the Bank saw significant growth in the adoption of its digital services, with up to 93% of transacting customers initiating their transactions through digital channels.
Rwanda reported a 25% increase in profit after tax for the period in review. The Bank’s strong performance was driven by increased economic activity, with loans and advances, and deposits growing by 17% respectively.
Tanzania recorded a profit after tax of Tsh 3.5 billion, a marginal improvement from last year. The performance was driven by net interest and non-funded income growth of 14% and 33% respectively.
Uganda recorded an improved performance, reporting a Profit Before Tax of UGX 6.4 billion compared to Ugx 15.0 billion in the third quarter of 2021, aided by a reduction in loan loss provisions and increased recoveries. Operating income, grew by 5%, while, the balance sheet reported a 16% year-on-year growth to close at Ugx 851.2 billion.
The Group’s Joint venture in Mauritius, Bank One, recorded a Mur 265.4 million profit after tax driven by recoveries, cost containment measures and interest income growth of 11%. Bank One posted a profit after tax of Mur 160 million in its half-year results.
Outlook for the remainder of 2022
The Group’s Executive Director, Mr. Sarit Raja Shah is optimistic about the Group’s performance in the final quarter of the year on the back of a peaceful general election in Kenya and the successful implementation of the Imara 2.0 growth strategy.
“We continue to reap the benefits of our iMara 2.0 strategy which focuses on driving business growth, building resilience, and optimising operations. We are strategically positioned to drive our market share in our operating countries, with the sturdy growth of our digital payments and transactional banking solutions,”
said Mr. Shah.
He concluded:
“The Group will continue seeking strategic partnerships to enhance customer experience, and to deliver efficient and profitable growth. We are appreciative of all our customers and other stakeholders who joined us on this journey of building a strong Eastern African bank.”
I&M Bank was recently recognized as the 2nd Runner Up in the Best in Bank Operations Category at the Sustainable Finance Initiative (SFI) Catalyst Awards by Kenya Bankers Association (KBA).