I&M Group PLC has continued its growth momentum into the first quarter of 2022, with the Group reporting a 44% growth in Profit after tax to Kes 2.7 billion compared to Kes 1.9 billion in the same period in 2021.
Key Financial Performance
During the period under review, the Group’s balance sheet and income metrics improved on the backdrop of a solid capital base and strong liquidity.
Balance sheet highlights
- The Group’s balance sheet grew steadily with total assets growing by 18%.
- The loan portfolio grew by 13% to Kes. 218.4 billion as at 31st March 2022 and Government securities were up by 21%.
- The net non-performing loans decreased by 31% year on year on the back of the expanded loan book and recoveries.
- Customer deposits closed at Kes. 309.4 billion, an 18% increase year on year.
Income statement highlights
- Net interest income for the period under review recorded a growth of 21% to close at Kes. 5.2 billion, an increase from Kes. 4.3 billion in March 2021 on account of improved earnings on loans and advances as well as from government securities.
- The strong growth in non-interest income was driven by a 20% increase in fees and commissions and a 76% jump in foreign exchange trading income from Kes 348.5 million in Q1 2021 to Kes 612.8 million in Q1-2022.
- Loan loss provisions reduced by 37% compared to the previous year on the back of provision releases and recoveries.
Commenting on the results, Mr. Daniel Ndonye, Chairman, I&M Group PLC, noted, “We are recovering from the impacts of the pandemic, and this is a key factor in the positive sentiment being shown across the sector. Though the calendar year 2021 posed its own challenges, our investments in digital infrastructure and customer value propositions have continued to put us on a positive trajectory.
“Our continued investment in our group-wide digital transformation, as well as on-going strategic partnerships have continued to give value to our customers,” Mr. Ndonye noted.
In Q1 in Kenya, I&M Bank Limited entered a partnership with global payments firm Mastercard to introduce new world class debit and credit cards targeting corporate C-Suite professionals, young professionals and high-net worth clientele. The cards offer a variety of lifestyle and travel benefits and the range consists of the Mastercard World Elite, Mastercard World Debit and Credit, Mastercard Platinum debit, Mastercard Corporate Standard and Corporate World cards.
Additionally, in order to deepen financial inclusion and reach more customers, I&M Bank Kenya has added the recently launched unsecured lending solutions onto their digital platform – I&M On The Go, making it more convenient and quicker for its customers to access unsecured loans through an automated platform.
Under the plan, customers can conveniently acquire loan facilities from a minimum of Kes 50,000 up to a maximum of Kes 3 million, without providing any collateral or guarantor as security. The loans are payable over a period of up to 3 years.
Further, the Bank has continued to invest into financial support programmes geared towards financing and relieving working capital constraints for foreign and local businesses. Recently the Bank celebrated the 5th year of its German Desk programme, during which time financial facilities worth more than 16 million USD (over Kes. 1.8 billion) had been provided to clients, enabling investments into German/European technologies.
Also, I&M Group PLC has continued to diversify revenue streams and drive business growth by offering Customised investment solutions, Asset Management, Retirement Income and Financial Planning through its subsidiary, I&M Capital, to help clients diversify their assets in order to balance their financial risks.
The Group’s Rwandan subsidiary reported a 19% increase in profit after tax for the period in review. This increased the Bank’s return on equity (ROE) and return on asset (ROA) to 12.14% and 1.61% respectively. The Bank’s strong performance was driven by increased economic activity, with loans and deposits growing by 11% and 3% respectively, which led to growth in net interest income and net fee income.
I&M Bank Rwanda grew its digital services adoption with 75% of all customers initiating transactions in the Bank through their digital channels.
I&M Bank Tanzania recorded a profit after tax of KShs 71 million compared to Kshs 62 million in March 2021 reflecting a 13% year on year growth. The performance was driven by a growth in net interest income and non-funded income by 27% and 14% respectively. The balance sheet grew by 9% to close at Kshs 28.7 billion.
I&M Bank Uganda returned to profitability with a profit after tax of Kshs 405 million. This was aided by an increase in operating income which grew by 30%, reduced loan loss provisions and increase in recoveries. The balance sheet reported a 15% year on year growth to close at Kshs 24.6 billion.
The Group’s Joint venture, Bank One, Mauritius recorded a 44% profit after tax year on year growth driven by reduction in loan loss provisions, increase in recoveries and interest income growth by 4%.
Outlook for remainder of 2022 The Group’s Executive Director, Mr. Sarit Raja Shah is positive for the Bank’s performance in the rest of 2022, amidst the looming impact of the upcoming elections in Kenya as well as the ongoing geo-political tensions in Russia and Ukraine. “We have had good momentum since the start of the calendar year and we remain optimistic that it shall continue despite both local and international geo-political factors. We remain confident that our rollout of our iMara 2.0 strategy will continue to bear fruit for us,” said Mr. Shah. “Our key areas of emphasis will continue to be enhancement of our digital capabilities as well as building our capacity to defend ourselves against credit, cyber threats and other risks. Also, we shall continue to focus on strategic partnerships within the region with local, regional and global partners so as to enhance the banking experience for our customers, current and future,” he added.