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I&M Group PLC has recorded KES 11.6 billion (USD87.8 million) in profit after tax for the full year ending December 2022; a 34% increase in profitability from KES 8.6 billion (USD65.1 million) reported during a similar period in 2021.
In results announced on 29th March 2023, I&M Group PLC attributed this impressive growth to the successful implementation of its iMara 2.0 strategy, which is now in its 3rd and final year, focusing on business growth, operational efficiencies, customer service centricity and digital transformation.
As a result of the strong performance, the Board has proposed a total dividend of KES 2.25 per share (USD0.017 cents), a 50 % increase from last year, bringing the total dividend payout to KES 3.7 billion (USD28 million) and a dividend yield of 13%.
The Group reported that its balance sheet grew steadily with total assets growing to KES 436.6 billion (USD3.3 billion) up from KES 415.2 billion (USD3.1 billion). This was supported by a 13% growth in the loan book which increased to KES 239 billion (USD1.8 billion).
Customer deposits closed at KES 312.3 billion (USD2.4 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 (USD173.6 million) from KES 21 billion (USD158.5 million) 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 (USD95.8 million) from KES 8.7 billion (USD65.7 million) 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 (USD121.5 million), 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.”
Performance by subsidiary
I&M Bank Kenya posted 39% increase in profit after tax for the period in review. I&M Group Plc also reported what it said was “significant growth in the adoption of its digital services, with 93% of customers initiating their transactions through digital channels”.
The Bank also said “it made significant progress on its commitment to its Environmental, Social and Governance (ESG) initiatives” reporting a “42% uptake of its KES 6 billion (USD45.3 million) Renewable Energy Funding Scheme dubbed “TheI&MGreenEnergyFund”. The fund was set aside to finance clean energy projects for customers to move to more environmentally friendly energy solutions.
The bank also reported growth in its other regional subsidiaries, which all together contributed 13% to overall banking profitability.
I&M Bank Rwanda reported a 22% increase in profit before tax for the period, driven by “increased economic activity, with loans and deposits growing by 4% and 10% respectively”. This drove 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,” the bank said in a statement.
I&M Bank Tanzania recorded a loss before tax of KES 688.7 million (USD 5.2 million) compared to a profit before tax of KES 492.4 million (USD 3.7 million) the previous year. This was attributed to “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 (USD238.5 million) from KES 28.8 billion 9USD217.4 million) 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,” the bank said.
I&M Bank Uganda recorded a profit before tax of KES 691.6 million (USD5.2 million) compared to a loss before tax of KES 1.1 billion 9USD8.3 million) in 2021. This, the bank said was aided by an increase in operating income which grew by 9%, and 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 (USD197.7 million). 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 bank said.
The bank also reported that its 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.
“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,” the bank added in its results statement.
Outlookfor2023
The Group’s Executive Director, Mr. Sarit Raja-Shah said he was 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.