I&M Group, a regional banking group with operations in Kenya, Tanzania, Rwanda and Mauritius, reported a marginal 2.2% increase in profit after tax (PAT) to Ksh 5 billion in the first half of 2023, compared to Ksh 4.9 billion in the same period last year.
Its earnings per share (EPS) also rose slightly by 2% to Ksh 2.89, despite the dilution from a rights issue in March 2023.
The bank’s performance was supported by a 22% growth in interest income to Ksh 21.3 billion, driven by higher lending and investment activities. The bank’s operating income also increased by 22.8% to Ksh 19 billion, boosted by higher fees and commissions from digital banking and trade finance.
However, the bank’s profitability was eroded by a surge in operating expenses, which jumped by 46% to Ksh 12 billion, mainly due to higher staff costs, depreciation and amortization, and other administrative expenses.
According to the half-year results, its provisions for bad loans by 144.5% to Ksh 3.2 billion, as it faced rising credit risk amid the Covid-19 pandemic and economic slowdown. The bank’s gross non-performing loans (NPLs) rose by 57.5% to Ksh 36.7 billion, raising its NPL ratio to 11.6%, well above the industry average of 9%.
The bank’s board of directors did not declare an interim dividend, citing the need to conserve capital and liquidity in the uncertain environment.
I&M Group is one of the leading banks in East Africa, with a presence in four countries and a customer base of over 2 million. The bank offers a range of products and services, including retail banking, corporate banking, SME banking, treasury, insurance and asset management.
