I&M Group has reported an impressive 30.9% surge in net profit, reaching Sh3.32 billion for the first quarter ended March 2024. This significant growth is attributed to a notable increase in net interest income, primarily driven by lending activities. The lender’s net interest income rose by 37.7% to Sh8.39 billion, offsetting a 9.4% decline in non-interest income to Sh3.16 billion.
The strategic decision to waive transactional fees for customers moving money from the bank to mobile money platforms, such as M-Pesa, has paid off. This move, implemented in mid-February last year, has accelerated the growth of personal accounts, enabling the expansion of other business lines, including loan disbursements. As a result, net loans and advances to customers grew by 13% to Sh291.48 billion by the end of March 2024.
Operating expenses for I&M rose by 10% to Sh6.64 billion during the period under review. This increase was largely driven by a 24.2% rise in staff costs, which reached Sh1.96 billion, reflecting both an expanded workforce and salary increments. Additionally, the bank opened eight new branches in Kenya mid-January and plans to add 12 more by the end of the year, contributing to the overall rise in operating expenses.
Despite the higher expenses, I&M managed to cut provisioning for loan defaults from Sh1.64 billion to Sh1.54 billion, demonstrating improved loan quality. Other operating expenses also increased by 15% to Sh2.2 billion, further contributing to the rise in operating costs. However, the bank’s strategic initiatives and robust performance have ensured continued profitability and growth.
In line with its strong performance, I&M will distribute a dividend of Sh2.55 per share amounting to Sh4.22 billion, based on the results for the year ended December 2023. This payout, scheduled for March 24, marks the third consecutive year of increased shareholder distribution, reflecting the bank’s commitment to delivering value to its shareholders.
Looking ahead, I&M plans to double its physical branches in Kenya to 100 by the end of 2026. This expansion aims to enhance the bank’s share of the retail banking market in the country, positioning I&M for continued growth and success in the competitive financial services landscape.
