This week, I&M Bank reported a monster jump in its third-quarter earnings, reaping Ksh14.1 billion in profit before tax, far higher than what most analysts had expected.
The East Africa chief executive of I&M Group PLC stated that the pre-tax profit for Q3 2024 represented a 24% increase from Ksh11.4 billion recorded over the same period a year earlier.
“The 24% increase in profitability is a marker of a strong start to our iMara 3.0 strategy,” said Kihara Maina, Regional CEO of I&M Group PLC. The iMara 3.0 is a three-year strategic framework by I&M aimed at growing its business in the banking sector. The strategy’s goals include increasing market share, expanding physical branches, and enhancing shareholder value while creating a positive impact and managing risks to become a market leader in banking.
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“Based on this strong performance, the Board of Directors announced an interim dividend of Ksh1.30 per share, to be paid in January 2025. As we celebrate I&M Bank’s 50th anniversary, we remain committed to customer-centric services, operational efficiency, and digital transformation to sustain profitability in the future,” Mr Kihara added.
But how exactly did the investment bank achieve this? I&M Group PLC saw strong operating revenues across all markets, with regional businesses contributing 28% of the Group’s Profit Before Tax. This growth was fueled by substantial gains in operating income, driven by a 49% increase in the corporate and institutional banking segment and a 28% increase in the retail banking segment.
Notably, I&M Bank Kenya recorded a 21% increase in profit before tax, driven by growth in net interest income. The Bank also achieved a 19% year-on-year increase in revenue and a 17% rise in operating profit.
“We are delighted to report double-digit growth in both revenue and profits. Our commitment to providing relevant financial solutions for Kenyans and building a distinctly Kenyan brand has led to a 14% increase in brand awareness, from 20% to 34%. More importantly, our growth reflects our focus on customer satisfaction, shown by our consistent Net Promoter Score (NPS) of over 70% this year,” said I&M Kenya CEO Gul Khan after the release of the Q3 financial results.
He continued, “I&M Bank’s initiative to make banking more accessible through the ‘Ni Sare’ free transfer to M-PESA and Airtel Money proposition has led to a 36% year-on-year increase in our customer base. Additionally, SME customer acquisition in Kenya surged by 270% since December 2023, following the extension of the Ni Sare Kabisa proposition to small businesses (Solo Biz) in April 2024.”
“This growth positions I&M Bank as one of the fastest-growing banks by customer numbers in the region, with over 600,000 customers now being served.”
Higher interest rates and expanded lending also boosted the Bank’s profit for the quarter ended September 30, even though loan loss provisions rose from Ksh4.6 billion in 2023 to Ksh5.5 billion in 2024.
Operating revenue grew by 20%, while the operating profit increased by 24% to Ksh18.9 billion, as Net Interest Income, which is the difference between interest revenues and interest expenses, rose significantly by 37%.
During the period, customer deposits increased by 3% to Ksh414 billion, retail lending expanded, though the overall loan portfolio declined by 2% to Ksh281 billion, and the Group’s Total Assets grew by 4% year-on-year to close at Ksh568 billion, according to the company’s balance sheet.
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