I&M Group PLC increased its profit after tax by 14% to KES 8.2 billion for the 9-month period ending 30 September 2023, up from KES 7.2 billion in the same period in 2022. The operating income was supported by growth in both corporate and retail segments as the Group saw its revenue diversification strategy yield fruit.
The Tier 1 banking Group recorded strong operating revenues across its markets, with regional businesses contributing 29% of its operating income.
The Group continues to successfully execute its iMara strategy, which is now in its 3rd and final year, focusing on business growth, operational efficiencies, customer centricity and digital transformation.
Key Financial Performance Highlights
Balance sheet highlights
The Group’s balance sheet grew steadily, with total assets increasing by 27% over the same period in 2022 to close at KES 544 billion.
The loan portfolio grew by 24% to reach KES 287 billion despite the challenging macroeconomic conditions across most of its markets. I&M’s targeted approach towards retail lending through its digital platforms was one of the key drivers contributing to this loan book growth.
Customer deposits closed at KES 402 billion, reflecting a 31% increase year on year, with both Current and Savings Accounts (CASA) and Term Deposits showing strong growth as the Group continued to focus on product innovation and digitalization.
Income statement highlights
Operating income recorded a growth of 19% to close at 29.9 billion up from 25 billion in Q3 2022 while loan loss provision closed at KES 4.6 billion up from KES 3.6 billion as the Group maintained prudence in asset quality management. The growth in total operating income was driven by an 18% and 21% growth in Net Interest Income and Non-Interest Income respectively for the period under review.
The Group’s operating expenses, exclusive of loan loss provisions recorded an increase of 29% year on year to close at KES 14.6 billion driven by continued investment in technology and people across all jurisdictions.
Commenting on the results, Mr Sarit Raja-Shah, Group Executive Director, I&M Group PLC, noted:
“I am pleased to report that the business responded resiliently to the challenges in the operating environment. There is overall positive growth across all our businesses and geographies and it underlines our commitment as a bank to finance the recovery of all our countries of presence. “
I&M Bank Kenya
I&M Bank Kenya posted an operating income growth of 13% year on year, 6% increase in operating profit and a 1% increase in profit before tax.
The successful implementation of the iMara strategy resulted in growth in deposits, primarily Current and Savings Accounts, Customer assets and New-to-Bank relationships.
As part of the strategy, the Bank has also seen significant growth in the adoption of its digital services, with over 90% of customers initiating their transactions through digital channels. Commenting on I&M Bank Kenya’s performance, I&M Bank’s CEO Mr Gul Khan said,
“Our performance today is reflective of our continued focus on providing solutions that are relevant to all Kenyans. We are especially keen to support our people as they navigate the tough macroeconomic environment. Through our Ni Sare and Largest campaigns, we have proven that there is still an opportunity for us to lead in the financial services sector by challenging the status quo. We remain committed and agile to our customers’ needs in providing relevant financial solutions and bringing our services closer to our customers.”
Regional growth
Regional subsidiaries of the Group continued to grow steadily, with operating income contribution increasing to 29% from 25% in 2022. For the period ending 30th September 2023, over 75% of I&M Group’s customers across the region were digitally active.
I&M Rwanda reported an 18% increase in operating income for the period under review. The Bank’s strong performance was driven by increased economic activity in the region, with loans and deposits growing by 20% and 32% respectively, which led to growth in net interest income and non-funded income.
In Tanzania, I&M recorded a 51% increase in operating income to close at KES 2.2 billion and a 102% increase in operating profit on the back of strong growth in total assets of 22%. Asset growth was supported by loan growth of 19% while deposits increased by 24%.
I&M Uganda posted strong growth in operating income of 52% and an operating profit of 222%, as it continues integrating into the Group. Total assets reported a 30% year-on-year growth to close at KES 35 billion, with growth in the loan and deposit book at 57% and 23% respectively.
Bank One, the Group’s Joint Venture investment in Mauritius, recorded a growth of 54% in operating income year on year, driven by the growth of the loan portfolio as well as higher Non-Interest Income.
Group Strategy & Outlook for 2023
As I&M Group concludes the second phase of its iMara strategy and embarks on its new chapter (2024-2026), Regional CEO, Mr. Kihara Maina remarked on the performance projection for the last quarter of 2023 positively. “We are now almost at the end of our iMara 2.0 strategy, and despite the macroeconomic challenges we have faced in 2023, we have remained on track to achieving our strategic ambition as Eastern Africa’s leading financial partner for growth. This is evidenced by the strong performance of all our subsidiaries. For the next phase of our iMara 3.0 strategy, the focus will be to shore up growth by leveraging the capacity built over the last few years. We shall continue this journey through relevant, efficient, and seamless financial solutions that meet our customers’ needs across all our markets.”
I&M Group’s active membership in the United Nations Global Compact (UNGC) reaffirms its dedication to green initiatives in alignment with the Group’s strategy which is anchored in a sustainability agenda. Enshrined in the agenda is a robust Environmental, Social & Governance (ESG) policy which acts as a guide for the institution in establishing resilient businesses across its subsidiaries.
Beyond this, The Group has taken a proactive approach in identifying investment opportunities to achieve net-zero impact. These include a focus on digital banking, transitioning to green energy, green financing products, and partnerships for sustainable production and consumption within the circular economy.
