I&M Group PLC, a prominent financial services provider in East Africa, recently released its results for the third quarter of 2023. The Nairobi-based banking group posted a 14% increase in profit after tax to KES 8.2 billion compared to KES 7.2 billion in Q3 2022.
This robust performance was underpinned by steady revenue growth across both its corporate and retail customer segments, as I&M’s regional diversification bore fruit. According to Group Executive Director Sarit Raja-Shah:
“I am pleased to report that the business responded resiliently to the challenges in the operating environment. There is an overall positive growth across all our businesses and geographies and underlines our commitment as a bank to finance the economic recovery of all our countries of presence.”
Strong Balance Sheet Momentum
An analysis of key balance sheet metrics shows the banking group’s robust growth trajectory:
- Total assets rose 27% year-over-year to KES 544 billion on the back of business expansion
- Gross loans registered significant 24% growth to reach KES 287 billion, despite navigating macroeconomic uncertainty across several African markets
- Customer deposits closed 31% higher at KES 402 billion, indicating strong funding momentum
I&M’s concerted push into digital consumer lending supported the expansion of its loan portfolio. The group also benefited from sustained innovations in deposit products and digitalization to acquire a wider deposit customer base.
Steady Increase in Operating Revenues
The group’s operating income for Q3 2023 climbed 19% year-on-year to KES 29.9 billion compared to KES 25 billion in Q3 2022. This topline growth was enabled by an 18% expansion in net interest income as well as a 21% rise in non-interest income streams.
While operating expenses increased 29% to KES 14.6 billion due to ongoing investments, the management continued to exercise caution over asset quality with loan loss provisions contained at KES 4.6 billion.
Upbeat Growth Projections for Kenya and Regional Units
I&M’s flagship Kenyan banking unit remains a key revenue contributor, posting a 13% uptick in operating income to complement its parent company’s regional growth efforts. Buoyed by steady progress in acquiring new customers and deposits, I&M Kenya reported a 6% rise in operating profit along with a marginal 1% increase in profit before tax.
According to I&M Bank Kenya CEO Gul Khan:
“Our performance today is reflective of our continued focus on providing solutions that are relevant to all Kenyans. We are especially keen to support our customers as they navigate the tough macroeconomic climate.”
He added that product innovations combined with convenient digital banking solutions have allowed I&M to differentiate itself in Kenya’s competitive financial industry.
Meanwhile, the group’s regional banking subsidiaries saw their joint income contribution improve to 29% against 25% in Q3 2022. Highlights include:
- I&M Rwanda: 18% YoY rise in operating income, powered by 20% and 32% growth in loans and deposits respectively
- I&M Tanzania: 51% jump in operating income and 102% increase in operating profits
- I&M Uganda: 52% operating income growth and 222% surge in operating profits
- Bank One Mauritius (JV): 54% YoY improvement in operating income
Sustaining Growth Trajectory Through New Strategic Roadmap
With its current 3-year strategy nearing conclusion, I&M Group aims to sustain its growth momentum by leveraging operational capabilities built over time. Regional CEO Kihara Maina outlined the bank’s vision:
“We are now almost at the end of our iMara 2.0 strategy, and despite the macroeconomic challenges we have faced in 2023, we have remained on track…For the next phase of our iMara 3.0 strategy, the focus will be to shore up growth by leveraging the capacity built over the last few years.”
As part of this next strategic cycle from 2024-2026, the banking group plans to scale up innovation to serve customers better, penetrate new African markets and embed strong ESG governance practices.
Backed by the resilience exhibited in its latest earnings report for Q3 2023, I&M Group appears primed to deliver on its goal of becoming East Africa’s preeminent financial services provider over the next few years.