Operating income propels I&M Group post-tax profit 15 per cent to Sh13.3 billion

A surge in operating income has seen the I&M Group’s post-tax profit increase by 15 per cent to Sh13.3 billion in the full year financial results for the year ended December 31, 2023.

I&M’s operating income also went up by 20 per cent to Sh43 billion from Sh36 billion in the 2022 fiscal year, with 20 per cent of this revenue derived from its new strategic initiatives.

Its total assets increased by Sh142 billion to Sh580 billion as its loan portfolio also grew 30 per cent to Sh311 billion on the back of expanded retail lending through its digital channels.

However, I&M’s loan loss provisions grew from 13.7 billion in 2022 to 15.5 billion in 2023, with the net non-performing loan ratio standing at 5 per cent as at December 31, 2023.

Customer deposits closed with a 33 per cent growth year-on-year to Sh417 billion, which has been largely attributed to growth in CASA (Current Accounts and Savings Accounts).

With a presence in Kenya, Rwanda, Tanzania, Uganda and Mauritius, I&M credits its growth on its iMara2.0 strategy, which it implemented for three years ending in December 2023.

A 25 per cent surge in Net Interest Income saw its Operating Income grow driven by a rising interest rates and a 10 per cent growth in Non-Interest Income in the period under review.

The financial institution has credited the impressive growth in its Non-Interest income to an expanded income from banking transactions and foreign exchange trading.

Its operating expenses spiked by 26 per cent to close at Sh20 billion due to branch expansion, inflationary pressures and increased investment in staff and technology.

The Group’s profits gained from its joint venture in Mauritius, Bank One Limited posted a growth year-on-year of 82 per cent to close the full year at Sh1.2 billion.

“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,” said I&M Group Regional CEO Kihara Maina.

He added: “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."

I&M Bank Kenya’s operating income grew by 14 per cent year on year, 7 per cent increase in operating profit and a 1 per cent drop in Pre-Tax Profit, owing to higher loan loss provisions.

“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 per cent increase in our total customers and over 100 per cent increase in digital transactions,” said I&M Bank CEO Gul Khan.

He added: “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 Sh10 million.”

During the period under review, I&M expanded its branch network by 8 and plans to open 12 more branches in the 2024 financial year as lender commemorates its 50th anniversary.

The Tier 1 lender's regional subsidiaries contributed 24 per cent to its overall profitability, with I&M Bank Rwanda reporting a 24 per cent growth in Pre-Tax Profit for the reviewed period.

I&M Tanzania posted a Pre-Tax Profit of Sh309 million up from a Sh689 million loss in 2022 due to 47 per cent total assets growth, with loans and deposits growing by 45 per cent and 55 per cent respectively.

I&M Bank Uganda’s operating income grew 41 per cent as its total assets grew 44 per cent to close at Sh38 billion, with loans and deposits growing by 53 per cent and 38 per cent respectively.

The Group’s joint venture in Mauritius, Bank One, posted an 80 per cent Pre-Tax Profit growth, on the back of a growing loan portfolio alongside a higher non-interest income.