I&M posts 2.5 percent rise in net profit to Sh8.62 billion

I&M Holdings has registered a 2.5 percent rise in net profit for the year ended December 2021, supported by interest income from loans and investment in government securities.

The Group’s net profit growth to Sh8.62 billion in the year, softened compared to other top-tier banks that have registered double-digit net profits. 

The bank has recommended a 33.3 percent rise in dividend payout to Sh1.50 dividend per share or an aggregate of Sh2.48 billion compared to Sh1.125 per share and Sh1.86 billion in 2020.

“2021, being the second year of the pandemic, was not devoid of challenges. The Group made key investments during the period under review to help us position ourselves better for future growth through enhanced resilience initiatives and optimisation of our operations,” said &M Group chairman Mr Daniel Ndonye.

“Specifically, we accelerated our digital transformation activities across the Group in a bid to deliver value to our customers through provision of innovative financial solutions.’’

Total operating income was up 22.2 percent to Sh29.61 billion supported by 8.6 percent rise in net interest income from loans and advances to Sh23.77 billion.

Interest from investment in government securities jumped 62 percent toSh9.07 billion, followed a continued trend in increasing pumping of money by commercial banks to government bonds that have been highly preferred due to their almost risk-free nature.

The review period has seen the bank register a 40.8 percent jump in total operating expenses, squeezing in the net profits.

The rise in expense was on account of an increase increased investment in digitisation and loan loss provisions.

The provisions jumped by 69.8 percent to Sh4.20 billion over the period that I&M attributed to cater for portfolios affected by Covid-19 in 2021.

This has differed from a reflected cut in loan loss provisions by majority of the banks amid recovery from Covid-19 economic hardships pushing for the record net profits.

Its net loan book was up Sh12.4 percent to Sh210.62 billion.

The bank has shown optimism in this year’s despite the in geopolitical tensions in Russia and Ukraine and the upcoming general elections.

“Our focus is now to build on our solid foundation through building resilience against emerging operational, credit and cyber risks, and enhancing our liquidity and capital position," Mr Ndonye said.

We will continue to diversify our revenues through expanding our customer segment penetration, credit offerings and other advisory and wealth management solutions.”