I&M Group, a prominent financial institution, has announced a marginal 2 per cent decrease in profits, amounting to Sh7 billion, for the six months ending in June 2023.
This decline, as compared to the corresponding period in the previous year, is attributed to a surge in loan loss provisions.
The lender's net non-performing loans were recorded at Sh10 billion, underscoring the challenges posed by the prevailing macro-economic environment.
Sarit Raja-Shah, the Group Executive Director of I&M Group PLC, shed light on the situation, stating, "The rise in the Non-Performing loan book and provisions reflects our cautious approach to portfolio management amid a challenging business environment."
Raja-Shah emphasized the group's focus on prudent portfolio management strategies in the face of these economic hurdles.
"As we move ahead, the Group’s emphasis remains on expanding our portfolio and enabling our customers to achieve their business goals," Shah added.
Despite the profit dip, I&M Group displayed momentum in its operating income, which surged by an impressive 23 per cent to Sh9.1 billion during the review period.
The increase in revenue was notably bolstered by robust income generation in regional businesses, contributing a significant 27 per cent to the earnings.
The lender's loan portfolio exhibited a commendable growth of 17 per cent, reaching Sh270 billion, with a noteworthy contribution from retail lending facilitated by the group's digital platforms.
Gul Khan, the CEO of I&M Group, highlighted the bank's focus on providing tailored financial solutions for Kenyans.
"In the first half of the year, our focus centred on providing relevant financial solutions designed for Kenyans," Khan mentioned.
"This included waiving of Bank to mobile wallet charges with the Ni Sare Kabisa campaign to cushion Kenyans against the high cost of living, the Unsecured Personal Loan of up to Sh10 million,"
I&M Bank Kenya, a vital subsidiary of the group, demonstrated remarkable achievements despite challenges.
The bank recorded a 20 per cent year-on-year growth in operating income, a 17 per cent increase in operating profit, and a 6 per cent decline in profit before tax, predominantly due to heightened loan loss provisions.
These results were attributed to the successful execution of the iMara 2.0 strategy, leading to growth in deposits, customer assets, and new customer relationships.
The bank's steadfast commitment to innovation and digitisation was evident through its achievements in the digital realm.
Notably, 93.5 per cent of customers initiated their transactions through digital channels, leading to recognition by Finnovex East Africa for Excellence in Mobile Banking.
Looking forward, I&M Group remains dedicated to enhancing its customer-centric approach.
The institution plans to open new branches to bring financial services closer to its customers.
The Group's financial statement portrayed a robust performance with a 23 per cent growth in operating income and a significant 28 per cent growth in the Retail Segment.
Despite the challenging economic landscape, the group's balance sheet exhibited steady growth, crossing the Sh500 billion milestone with a 17 per cent increase over the same period in the previous year.
Customer deposits witnessed a 14 per cent year-on-year increase, reaching Sh357 billion, a testament to the success of the group's ongoing focus on innovation and digitisation.
The surge in operating income was attributed to a 16 per cent growth in Net Interest Income and a remarkable 37 per cent growth in Non-Interest Income for the review period.