I&M Group has declared a rare interim dividend of Sh1.3 per share, continuing with its move to distribute more of its earnings to shareholders.
The company has historically paid only a final dividend after the close of each financial year.
The lender, while publishing its results for the nine months ended September, declared a surprise interim payout amounting to an aggregate of Sh2.1 billion.
The dividend will be distributed on January 14, 2025, to shareholders who will be on the register as of December 16, 2024, with I&M saying the decision to make the interim payout was informed by the performance in the nine months when net profit rose 18 percent.
“The…increase in profitability are markers of a strong start of our iMara 3.0 strategy. Based on the strong performance, the board of directors announced an interim dividend of Sh1.30 per share,” I&M’s regional chief executive Kihara Maina said in a statement.
The banking multinational is also set to receive a cash infusion of Sh4.18 billion from the issue of 86.5 million new shares to a consortium of institutional investors including private equity fund AfricInvest and Norwegian sovereign wealth fund Norfund.
The funds are set to be invested in short-term fixed income instruments before they are deployed in local and regional expansion, further augmenting the bank’s cash holdings in the interim.
“The company intends to deploy the subscription proceeds to grow the group’s business activities with the aim of achieving its strategic ambitions set out under the iMara 3.0 strategy, including the aspiration to increase its market share in the region and grow shareholder value,” I&M said in an abridged circular to shareholders.
“However, until the funds are fully deployed, the group companies will invest the additional capital in short-term investments to yield interest and other investment income.”
The interim dividend indicates that the Nairobi Securities Exchange-listed firm could pay a higher total dividend for the year ending next month compared to last year’s Sh2.55 per share or a total of Sh4.2 billion.
I&M has been paying a higher dividend since the year ended December 2021, with the portion of profits distributed to shareholders rising to 33 percent from lows of 20 percent even as the bottom-line expanded.
I&M posted an 18 percent rise in net profit in the nine months to September driven by higher interest income from loans and government securities.
The company made a net profit of Sh9.1 billion in the review period, up from Sh7.7 billion the year before.
Total interest income from loans and government paper rose to Sh49 billion from Sh34.1 billion in a period when interest rates rose substantially.
I&M said its regional subsidiaries made a positive contribution to the group’s profit.
The banking multinational has a 50/50 joint venture in Mauritius and subsidiaries in Rwanda, Tanzania and Uganda.
