July 18, 2024

I&M Bank’s Net Profit Climbs 12.7%, Shareholders to Enjoy Sh2.55Dividend

I&M Bank's Net Profit Climbs 12.7%, Shareholders to Enjoy Sh2.55Dividend

I&M Bank Limited net profit after tax increased by 12.7% to Ksh 13.35 billion in FY’2023, according to the financial results released by the bank on Monday the 25th. This comes as welcome news for shareholders, who will be rewarded with a healthy dividend payout of Sh2.55 per share, translating to a compelling dividend yield of 13%.

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Customer loans, a key indicator of the bank’s lending activity, exhibited a significant 30.5% growth to Ksh 311.33 billion. This surge suggests a strong appetite for credit from businesses and individuals, potentially fueled by economic recovery and investment opportunities. 

Furthermore, total assets climbed by an impressive 32.6% to Ksh 579.72 billion, highlighting I&M’s overall growth trajectory.

Depositors also displayed increased confidence in i & m bank, reflected in a 33.4% rise in customer deposits to Ksh 416.67 billion.

This strong deposit base provides the bank with a solid foundation for future lending activities and financial stability. However, shareholders’ funds witnessed a more moderate increase of 15.2% to Ksh 88.17 billion.

I&M’s income statement further reinforces its path towards profitability. Interest income, the primary revenue stream for most banks, saw a significant 35.1% increase to Ksh 50.46 billion. This growth can be attributed to the bank’s expanding loan portfolio and potentially rising interest rates. 

However, interest expenses also witnessed a substantial rise of 51.5% to Ksh 21.83 billion. This increase likely reflects the bank’s need to offer competitive rates to attract deposits in an environment of potentially rising interest rates. 

Despite the rise in expenses, net interest income still managed to grow by a healthy 24.8% to Ksh 28.63 billion. Net interest income represents the difference between interest income and expense.

Non-interest income also exhibited positive growth, albeit at a more modest rate of 10.4% to Ksh 14.05 billion. It encompasses revenue generated from fees and commissions for services like account maintenance, wealth management, and trade finance.

This suggests that I&M is successfully diversifying its revenue streams beyond traditional interest-based income, reducing reliance on the fluctuations of interest rates. 

Overall, total revenue for the bank climbed by 19.7% to Ksh 42.68 billion, showcasing its ability to generate healthy profits.

READ ALSO: What I&M Bank Ltd’s Surge Reveals About Company Potential

While I&M’s revenue streams experienced growth, so did its operating expenses. Total operating expenses increased by 27.5% to Ksh 27.21 billion. 

A deeper dive into the results reveals the dominance of i & m bank kenya within the i&m group plc. Mr. Gul Khan, Chief Executive Officer of I&M Bank Kenya, highlighted several key statistics that solidify this position. 

First, Kenya’s subsidiary has contributed a significant 76% to the group’s overall profit after tax. This indicates that i&m bank kenya is the primary driver of profitability for the entire group.

Furthermore, it constitutes a staggering 70% of the group’s total assets, showcasing the bank’s substantial size and financial muscle within the i & m ecosystem.

This dominance is further supported by Mr. Khan’s revelation that i&m bank kenya’s customer base has grown by a remarkable 27% from December 2022 to December 2023.

This significant expansion suggests the bank is successfully attracting new customers and deepening its penetration within the Kenyan market. 

Additionally, impressive growth was observed in digital transactions, with a 35% surge from Q3 2023 to Q4 2023. This highlights i & m bank kenya’s commitment to digital innovation and its ability to cater to the evolving needs of tech-savvy customers.

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While I&M Bank Kenya stands out as the group’s powerhouse, the report also sheds light on the performance of the i&m group’s presence in other regional markets. 

I&M Bank Rwanda, for instance, displayed a noteworthy 24% increase in profit before tax (PBT) from FY 2022 to FY 2023.

The strong performance in the Rwandan market signifies I&M’s ability to adapt its strategies to thrive in diverse economic environments. Furthermore, Rwanda contributes a significant 12% to the group’s overall PBT and holds 15% of the group’s total assets. 

I&M Bank Uganda, although constituting a smaller portion of the group, also exhibited positive growth, contributing 3% to the group’s PBT. Its total assets represent 7% of the group’s total.

Interestingly, I&M Bank Tanzania’s contribution to the group’s PBT remained at 2%, similar to the previous year. However, its total assets still hold an 8% share within the group.

I&M Bank’s robust financial performance in FY’23 can be attributed to its strategic initiatives and customer-centric approach, supported by its innovative banking solutions. 

The accessibility and convenience offered by i&m bank branches and digital banking platforms, including the user-friendly i&m bank login portal and the i&m bank on the go mobile app, have facilitated increased customer engagement and transactions. 

Moreover, the bank’s commitment to customer satisfaction is evident in its efficient customer service, with readily available contacts (+254 719 088 000, +254 20 322 1000, +254 732 100 000, +0800721088.) for assistance and inquiries.

The i&m bank paybill number 542 542 and the i&m bank ussd code *458#, have also streamlined transactions for both individuals and businesses.

The focus on transparency and competitive i&m bank exchange rates has further bolstered customer trust and confidence, attracting more clients and fostering increased financial activity.