I&M Group has registered a 43.6 percent rise in net profit for the three months to March, supported by interest income from loans, investment in government securities, and a jump in the profitability of its subsidiaries.
The lender registered Sh2.7 billion in net profit in quarter one compared to Sh1.9 billion in the same period in 2021, after a 20.7 percent rise in net interest income to Sh5.2 billion from Sh4.3 billion.
This was also on the back of the overall positive performance of its subsidiaries in Tanzania, Uganda, Rwanda and Bank One in Mauritius.
The Nairobi Securities Exchange-listed bank has also attributed the performance to the digitisation strategy targeting both retail and corporate clients and helping push non-funded income.
“We are recovering from the impacts of the pandemic, and this is a key factor in the positive sentiment being shown across the sector. Though the calendar year 2021 posed its own challenges, our investments in digital infrastructure and customer value propositions have continued to put us on a positive trajectory,” said I&M Group Plc chairman Daniel Ndonye.
Ugandan subsidiary returned to profitability with a profit after tax of Sh405 million, aided by an increase in operating income which grew by 30 percent and reduced loan loss provisions.
This was the first quarter performance recorded under the Group after the acquisition of 90 percent stake in Uganda’s Orient Bank Limited, which was completed in April 2021.
I&M Bank Tanzania recorded a net profit of Sh70 million compared to Sh62 million in March 2021, reflecting a 13 percent jump driven by growth in net interest income and non-funded income, while Rwandan business registered a 19 percent growth in net profit to Sh214 million from Sh180 million.
Mauritius’ Bank One after-tax profit contribution was Sh120 million, representing a 50 percent share in the joint venture, a 44 percent rise from Sh84 million in the same quarter in 2021.
Group’s non-funded income grew by 20.3 percent to Sh2.2 billion over the period, driven by an increase in fees and commissions on loans and advances and a 75.8 percent jump in foreign exchange trading income to Sh612.8 million from Sh348.5 million.
The loan book grew by 13.1 percent to Sh218.4 billion as at the end of March.
Loan loss provisions reduced by 36.7 percent compared to the same period in 2021, while gross non-performing loans decreased by 4.4 percent to Sh23.6 billion.
The Group’s executive director Mr Sarit Raja Shah said the quarter’s trajectory highlights a positive full year’s performance for the bank despite the looming impact of the upcoming elections in Kenya as well as the ongoing geopolitical tensions in Russia and Ukraine.
“We have had good momentum since the start of the calendar year and we remain optimistic that it shall continue despite both local and international geopolitical factors,” said Mr Shah.
“Our key areas of emphasis will continue to be enhancement of our digital capabilities as well as building our capacity to defend ourselves against credit, cyber threats and other risks. Also, we shall continue to focus on strategic partnerships within the region with local, regional and global partners so as to enhance the banking experience for our customers, current and future.”