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I&M Group PLC has recorded a Profit After Tax of KES 13.3 billion (approximately UGX390 billion; over USD101 million) for the year ended 31st December 2023. This is a 15% increase from the KES11.6 billion in 2022.
The regional financial services provider with operations in Kenya, Rwanda, Tanzania, Uganda and Mauritius, attributed the 15% growth in its profits to an increase in its operating income.
During the period under review, the Group’s balance sheet and income metrics improved with the liquidity and capital ratios remaining strong.
2023 Balance sheet highlights
The Group’s balance sheet grew steadily with Total Assets increasing by KES 142 billion to KES 580 billion.
The loan portfolio grew by 30% to KES 311 billion partly attributed to the extension of retail lending through the Bank’s digital platforms with a net non-performing loan ratio at 5% as of 31st December 2023.
Customer deposits closed at KES 417 billion, recording a 33% increase year-on-year, largely attributed to growth in CASA (Current Accounts and Savings Accounts).
The bank also reported growth in operating income, driven by a 25% increase in Net Interest Income on the back of rising interest rates and a 10% growth in Non-Interest Income for the period under review. The Non-Interest income growth is attributed to growth in income from banking transactions and foreign exchange trading.
The Group’s operating expenses, exclusive of loan loss provisions rose by 26% year-on-year to close at KES 20 billion on account of branch expansion, inflationary pressures and as a result of increased investment in staff and technology.
The Group’s share of profit from its joint venture in Mauritius, Bank One Limited recorded a year-on-year growth of 82% to close at KES 1.2 billion.
Commenting on the results, Mr. Kihara Maina, I&M Group PLC, Regional CEO noted: “Building upon the success of our recently concluded iMara 2.0 strategy, we have witnessed remarkable achievements in both profitability and growth in our various business units. As we venture into the next chapter with our iMara 3.0 strategy, our primary aim is to sustain the growth through continued focus on enhancing our digital solutions platforms and building an ecosystem to support our customers’ businesses, as we seek to become Eastern Africa’s Leading Financial Partner for Growth.”
“In the context of the Group’s strategic focus, the 2023 performance is a clear affirmation that the iMara2.0 strategy which came to an end in 2023 after a three-year period, has delivered remarkable year-on-year results. The focus on delivering the iMara2.0 strategy over the past three years has seen Return on Equity grow from 10% in 2020 to 15% in 2023. Operating income grew by 20% from KES 36 billion in the previous year to KES 43 billion with 20% of this revenue coming from new strategic initiatives during this phase,” the bank added in a statement.
I&M Bank Kenya
I&M Bank Kenya posted an operating income growth of 14% year on year, 7% increase in operating profit and a 1% drop in Profit Before Tax, due to higher loan loss provisions.
In the prior year, the successful implementation of our strategy resulted in significant growth in new customers, deposits, primarily Current and Savings Accounts (CASA), and customer loans. Additionally, through relevant product innovation and brand building, brand awareness grew from 5% to 20%.
As part of the strategy, the Bank has also seen significant growth in the adoption of its digital services, with 93% of customers being digitally active.
Commenting on I&M Bank Kenya’s performance, I&M Bank’s CEO Mr. Gul Khan said: “Throughout the year, our primary focus was on delivering new and relevant financial solutions designed to solve problems for Kenyans which resulted in a 27% increase in our total customers and over 100% increase in digital transactions. We saw significant growth driven by innovative solutions such as the ongoing Ni Sare Kabisa free transfers to M-PESA and Airtel Money and the largest unsecured personal loan of up to KES 10 million. Our commitment to customer-centricity remains firm, as evidenced by our countrywide branch expansion which has seen us open 8 branches, with plans to open 12 more, to be closer to our customers. Furthermore, we will continue to launch new and relevant solutions for our customers as we celebrate 50 years of I&M Bank in Kenya.”
Regional growth
The Group’s regional subsidiaries continued to show steady growth, contributing 24% to the Group’s overall profitability. For the period ending 31st December 2023, 78% of I&M Group customers across the region were digitally active. Non-branch transactions also increased to 81%.
I&M Bank in Rwanda reported a 24% increase in Profit Before Tax 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 48% and 39% respectively, which led to growth in Net Interest Income and Non-Funded Income.
In Tanzania, the Bank recorded a Profit Before Tax of KES 309 million up from a loss of KES 689 million in 2022 on the back of strong growth in total assets of 47%, with loans and deposits growing by 45% and 55% respectively.
I&M Bank Uganda posted strong growth in operating income of 41%. Total assets reported a 44% year-on-year growth to close at KES 38 billion (approximately UGX1.1 trillion), with growth in the loans and deposits book at 53% and 38% respectively.
The Group’s joint venture investment in Mauritius, Bank One, recorded a growth of 80% in Profit Before Tax year on year, driven by the growth of the loan portfolio as well as higher non-interest income.
The Group’s continues to build a relevant brand evidenced by an enhanced Net Promoter Score of 71% in 2023 from 34% in 2020. Customer numbers went up to 560,000 from 250,000 during the same period.
Digitally active customers increased to 78% in 2023 with 81% of the total transactions done through digital channels. The number of transactions increased to 29 million in 2023 from 6.2 million in 2020 with a value of KES 1.2 trillion.
The Group’s employee engagement increased to 78% from 75% in 2020.
50 Years of I&M Bank
I&M Bank celebrates its golden jubilee this year marking 50 glorious years since its incorporation in 1974. The entrepreneurial spark of the Founder and Chairman Emeritus, Mr. SBR Shah, MBS ignited a vision of greatness that has seen I&M Bank grow from a community-based lending outfit to a regional financial services Group with a presence in 5 countries