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I&M Group Raises Dividend Payout Following 12.70% Net Profit Growth to Sh12.6 Billion.

 I&M Group Raises Dividend Payout for Third Consecutive Year to Sh2.55 per Share, Totaling Sh4.22 billion, following 12.7% Net Profit Growth to Sh12.62 billion for FY Ended December 2023.

I&M directors said the dividend will be paid on or around May 24, to shareholders on the company’s register at the close of business on April 18. The proposed dividend per share is a rise from Sh2.25 per share or a total of Sh3.72 billion paid a year earlier.

The regional financial services provider with operations in Kenya, Rwanda, Tanzania, Uganda, and Mauritius, attributed the 15% growth in its profits to an increase in its operating income.

During the review period, I&M saw its net interest income increase by 24.8% to Sh28.6 billion, with the loan book growing from Sh238.59 billion to Sh311.3 billion. Non-interest income also rose by 10.4% to Sh14.05 billion, contributing to overall operating income growth.

However, operating expenses went up by 27.5% to Sh27.2 billion from Sh21.3 billion. This increase was mainly due to higher provisioning for loan defaults and increased staff costs.

Loan loss provisioning increased by 31% to Sh6.87 billion, reflecting the economic challenges faced by borrowers amidst rising interest rates. Additionally, staff costs rose by 15.5% to Sh7.48 billion due to the hiring of new workers for opening new branches.

“We saw significant growth driven by innovative solutions such as the ongoing Ni Sare Kabisa free transfers to M-Pesa and Airtel Money and the largest unsecured personal loan of up to Sh10 million,” said I&M Group Regional CEO Kihara Maina. “The increase that we see in the non-performing loan really is the reflection of the difficult macroeconomic environment that we have seen particularly here in Kenya,”

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“We have seen policy responses in central banks in many of our operating environments by increasing rates to deal with inflation and currency movements. We see this start to plateau, and we expect to see interest rates start to come down,” He added.

Mr Maina further said the group closed 2023 with 2,814 employees compared with 2,143, translating to an additional 671 workers, contributing to the rise in staff costs.

During the period under review, the Group’s balance sheet and income metrics improved with the liquidity and capital ratios remaining strong. The Group’s balance sheet grew steadily with Total Assets increasing by KES 142 billion to KES 580 billion.

The loan portfolio grew by 30% to KES 311 billion partly attributed to the extension of retail lending through the Bank’s digital platforms with a net non-performing loan ratio at 5% as of 31st December 2023. Customer deposits closed at KES 417 billion, recording a 33% increase year- on-year, largely attributed to growth in CASA (Current Accounts and Savings Accounts).

The Group’s regional subsidiaries continued to show steady growth, contributing 24% to the Group’s overall profitability. For the period ending 31st December 2023, 78% of I&M Group customers across the region were digitally active. Non-branch transactions also increased to 81%.

I&M Bank in Rwanda reported a 24% increase in Profit Before Tax 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 48% and 39% respectively, which led to growth in Net Interest Income and Non-Funded Income.

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In Tanzania, the Bank recorded a Profit Before Tax of KES 309 million up from a loss of KES 689 million in 2022 on the back of strong growth in total assets of 47%, with loans and deposits growing by 45% and 55% respectively.

I&M Bank Uganda posted strong growth in operating income of 41%. Total assets reported a 44% year on year growth to close at KES 38 billion, with growth in the loans and deposits book at 53% and 38% respectively.  

The Group’s joint venture investment in Mauritius, Bank One, recorded a growth of 80% in Profit Before Tax year on year, driven by the growth of the loan portfolio as well as higher non-interest income.

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