I&M bank records 25% profit before tax for 2024

Regional financial services provider, I&M Bank, has recorded a 25 per cent growth for the financial period that ended December last year.

The bank realised Ksh 20.8 billion profit before tax in which they termed was driven by an increase in the operating income and strategic focus on MSME lending and digital transformation.

“The MSME loan book more than doubled, reinforcing the Group’s commitment to catalysing economic growth and job creation amidst macroeconomic challenges,” I&M Group Regional Chief Executive Officer Kihara Maina stated.

The lender also says the operations in Kenya, Mauritius, Rwanda, Tanzania, and Uganda have continued to strengthen its market position through its iMara strategy.

The bank has attributed that the strategy has significantly expanded the Group’s MSME portfolio, with MSME customers growing six-fold since 2023 and the related balance sheet more than doubling.

Deposits by I&M customers for the period under review stood at Ksh 412 billion with strong growth in both current  and savings accounts.

I&M Group synergies contributed to a 57 per cent increase in cross-border revenue year-on-year, with total income rising by 20 per cent to Ksh 51 billion.

Net Interest Income grew by 31 per cent as Fees and commission income increased by 16 per cent year-on-year from Ksh 6.9 billion to Ksh 7.9 billion, although the overall non-interest income reduced marginally by 3 per cent year-on-year.

The Group’s operating expenses, exclusive of loan loss provisions, rose by 16 per cent year-on-year to close at Sh23 billion because of branch expansion and increased investment in staff and technology.

Additionally, I&M Group has impacted over 6.3 million lives through its direct efforts and ecosystem partnerships.

The Group’s total assets grew by 0.3 per cent to Ksh 581 billion.

Kihara said I&M’s focus is on delivering the iMara Strategy, which has led to remarkable gains in MSME growth, digital banking, and customer expansion.

“We remain committed to driving financial inclusion and building an ecosystem that supports our customers’ businesses sustainably. We also reengineered the Strategy to focus on sustainability, which led to the adoption of a group-wide sustainability action plan,” he stated.

I&M Bank Kenya has remained the Group’s key business, contributing 71 per cent, though it’s a decrease from the previous year’s 78 per cent of overall profit before tax.

The bank posted a 16 per cent year-on-year growth in revenue and a 17 per cent increase in profit before tax.

The lender’s customer base doubled in two years, 50 per cent of whom were onboarded digitally, reinforcing the bank’s commitment to a tech-driven 87 per cent model and increasing digital transactions by 132 per cent.

The Bank has also seen a significant growth in the adoption of its digital services, with 95 per cent of customers being digitally active.

I&M Bank Kenya’s CEO Gul Khan said key innovations such as Ni Sare Kabisa free transfers to M-PESA and Airtel Money for individuals and small businesses, digital short-term loans, goal-based savings, and the largest unsecured personal loan of up to Ksh 10 million have driven customer adoption.

“Our strategy of delivering digital products and services that are relevant to customers has yielded strong growth. Our customer base has doubled in 2 years. We have continued to invest heavily in our App and Online Banking to enhance customer experience. These efforts resulted in I&M Bank being recognized as the top bank for consumer sentiment on social media by DataEQ,” Khan remarked.

I&M Group’s regional subsidiaries contributed 29 per cent to overall profitability compared to 24 per cent in the prior year.

Non-branch transactions accounted for 81 per cent of all transactions, with 78 per cent of customers across the region being digitally active.

I&M Bank Rwanda reported a 57 per cent increase in profit before tax, driven by increased economic activity and strong income growth driven by customer acquisition and balance sheet growth.

I&M Bank Tanzania recorded a profit before tax of Sh1.06 billion, up from Sh309 million in 2023, supported by asset growth and recoveries.

I&M Bank Uganda achieved a 78 per cent increase in profit before tax, with total assets growing by 21 per cent in local currency to cross the UGX 1 trillion mark.

Bank One (Mauritius) ‘s operating income for the joint venture with Ciel Group grew by 5 per cent, reflecting prudent balance sheet growth; however, Profit before Tax declined by 27 per cent due to increased loan loss provisions

I&M Group chairman Oliver Fowler stated that following the strong performance, the board of directors has proposed a Ksh 1.70 final dividend, which, together with the interim dividend of Ksh 1.30 per share, totals Ksh 3.00 per share – a 17 per cent increase from Ksh 2.55 per share in the prior year.