I&M Bank Rwanda unit lost $10.3 million (Sh1.41 billion) to fraudulent customer withdrawals in under three months, triggering investigations in an attempt to recover the amount.
The amount, which is more than the Sh1.04 billion net profit that I&M Group had generated from the Rwandan market in the financial year ended December 2022, was lost between November 1 last year and January 17.
I&M Group has made the disclosures in its annual report after the end of the financial year ahead of the general meeting with shareholders.
“Subsequent to year-end, management of I&M Bank (Rwanda) PLC discovered incidents of fraudulent withdrawals through customer wallets amounting to $10.3 million during the period 1 November to 17 January 2023,” said the group in the annual report.
“As of the date of these financial statements, some recoveries have been made and investigations are still ongoing.”
Banks insure cash at hand, cash at bank and cash in transit to shield themselves from loss of money and, therefore, part of I&M losses could be borne by underwriters.
I&M Bank entered Rwanda in 2012 through the acquisition of a majority shareholding in Banque Commerciale du Rwanda and holds a 54.47 percent stake through BCR Investment Company.
The stake was worth Sh2.11 billion at the end of December.
The Rwandan unit, with more than 65,000 customers served by about 18 branches, 33 ATMs and more than 400 employees, has been I&M ’s most profitable business outside Kenya.
I&M Rwanda closed last year with Sh1.04 billion net profit from Sh1 billion in the previous period while that of Mauritius and Uganda operations returned net profits of Sh644.2 million and Sh288 million respectively.
The Tanzanian unit returned a Sh506.86 million net loss in the period I&M Kenya net earnings grew from Sh7.4 billion to Sh10.2 billion to lift the group’s profitability by 37.7 percent to Sh11.2 billion.