I&M Group PLC recorded a 29 per cent growth in total operating income at Sh.9.6 billion for the first quarter (Q1) of 2023 up from the Sh.7.4 billion reported during the same period in 2022.
The bank in a statement said that it continues to successfully execute its iMara 2.0 strategy, which is now in its third and final year, focusing on business growth, operational efficiencies, customer centricity and digital transformation.
According to the statement, during the period under review, the group’s balance sheet and income metrics improved on the backdrop of strong liquidity and a solid capital base.
The Group’s balance sheet grew steadily with total assets increasing by Sh.41.4 billion to Sh. 472.6 billion. The loan portfolio grew by 18 per cent to Sh.257.7 billion partly attributed to the extension of retail lending through the Bank’s digital platforms,” read the statement.
It further stated that the net non-performing loans stood at Sh.10 billion, a reflection of the challenging macro-economic environment. Customer deposits closed at Sh. 324.7 billion, a 5 per cent increase year on year, largely attributed to growth in CASA (Current Accounts and Savings Accounts).
“While the operating income recorded a strong growth of 29 per cent, the Group’s profitability was flat due to the growth in both expenses and provisions. Growth in total operating income was driven by 17 per cent and 59 per cent growth in Net interest income and non-interest income respectively for the period under review on account of growth in fees, commissions, foreign exchange income as well as interest from the loan portfolio and earnings from government securities,” read the statement in part.
Group Executive Director, I&M Group PLC, Mr. Sarit Raja Shah, noted “This first quarter posed its own challenges amidst rising inflation and the high cost of doing business. Our continued investments in the group-wide iMara 2.0 strategy that focuses on customer centricity and digital transformation as well as the on-going strategic partnerships, have continued to give value to our customers and stakeholders. We look forward to a continued positive trajectory in the coming quarters.”
I&M Bank’s CEO Mr. Gul Khan said: “During the first quarter we enhanced our retail proposition by launching “Ni Sare Kabisa” and “The Largest Unsecured Personal Loan of up to Sh. 10 million” campaigns as a testament to our continued commitment to solving customer problems. We take pride in our customer-centricity evidenced by our Net Promoter Score closing at 54 per cent against the banking sector average of 38 per cent in Kenya and plan to roll out several new branches over the next couple of years as we seek to enhance our distribution and visibility.”
As part of iMara strategy, the Bank has seen a significant growth in the adoption of its digital services, with 93 per cent of customers initiating their transactions through digital channels. In a move to support millions of mobile money users in Kenya, the Bank recently waived bank to mobile wallet charges amidst the tough economic environment.
I&M was recently recognized as a leading financial institution in Kenya when it was awarded the ‘Excellence in Mobile Banking’ award at the Finnovex Awards in May 2023 in addition to 4 awards at the Think Business Banking 2023 Awards.
The Group’s regional subsidiaries continued to show steady growth, contributing 17% to the Group’s overall profitability.
For the period ending 31st March 2023, 77 per cent of I&M Group customers across the region were digitally active. Non-branch transactions also increased to 76 per cent.
I&M Rwanda reported an 18 per cent 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 11 per cent and 8 per cent respectively, which led to growth in net interest income and non-funded income.
In Tanzania, I&M recorded a profit before tax of Sh. 22 million on the back of strong growth in total assets of 22 per cent, with loans and deposits growing by 19 per cent and 26 per cent respectively.
I&M Uganda posted strong growth in operating income of 31 per cent. Total assets reported a 22 per cent year on year growth to close at Sh. 30.2 billion, with growth in the loan and deposit book at 21 per cent and 17 per cent respectively.
The Group’s Joint Venture investment in Mauritius, Bank One, recorded a growth of 59 per cent 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 Regional CEO, Mr. Kihara Maina said that he was positive about the 2023 projection on the back of a robust Group adoption of the iMara 2.0 strategy.
“Coming into 2023, we have seen good momentum from a great performance in 2022. As we roll out the final year of our iMara 2.0 strategy, we remain confident in the progress we have made and look forward to taking the lessons into our next strategy in further steering I&M Group as Eastern Africa’s leading financial partner for growth. We will continue to focus on our key areas of emphasis which include enhancing digital capabilities as well as building customer-focused products and services,” said Mr. Maina.
By Joseph Ng’ang’a
