I&M Group #ticker:IMH has received a dividend of Sh227 million from its Mauritian subsidiary Bank One, with the cash set to contribute to the group’s total earnings this year.
The dividend was paid in January, according to disclosures by Bank One, which is owned on a 50/50 basis by the Nairobi Securities Exchange #ticker:NSE -listed firm and the island nation’s conglomerate CIEL Limited.
“Pursuant to the board meeting held on November 24, 2021, an interim dividend of 168 million Mauritian rupees (Sh454 million)…was approved for distribution as a dividend to shareholders,” Bank One says in its latest annual report.
“However, since approval from Bank of Mauritius was received in January 2022, the bank proceeded with the distribution in January 2022.”
I&M’s share of the dividend is equivalent to Sh227 million based on the current exchange rates. The payout, which marked a return to dividend distributions, came after the subsidiary recovered from losses in 2020 largely due to the impact of the Covid-19 pandemic.
Bank One made a net profit of MUR413 million (Sh1.1 billion) in the year ended December, reversing a net loss of MUR492 million (Sh1.3 billion) a year earlier.
The subsidiary’s profit in the review period saw I&M book an income of Sh549 million from its share of the joint venture, emerging from the loss of Sh679 million it soaked the year before.
“Bank one bounced back during the year on account of bad debt recoveries,” said I&M when announcing its results for the year ended December.
I&M and CIEL invested an additional Sh793 million in the Mauritian unit in 2020 to boost its capital position in the wake of the pandemic which increased credit risk for banks worldwide.
The new equity capital was supplemented by borrowings amounting to Sh1.5 billion.
Improved profitability at Bank One saw the subsidiary return to paying dividends which it had suspended in 2020. The lender had paid a dividend of MUR138 million (Sh373 million) in 2019.
The subsidiary’s profit in the year ended December was helped by a reversal of the credit impairment charges seen in the prior year.
“Non-performing loans were significantly managed down during the year, from circa nine percent in 2020 to just above three percent for the year under review. A major achievement in very difficult trading conditions,” Bank One said.