I&M bank net profit up 26.6pc to Sh10.76 billion

I&M Bank branch in Nyeri town. FILE PHOTO | NMG I&M Holdings net profit jumped 26.6 percent to Sh10.76 billion last year supported by growth in non-interest income and reduced expenses, cementing its position as fourth most profitable lender in the country.

The growth, from Sh8.5 billion posted in the previous year, saw the lender join the league of Sh10 billion and above profit for the first time ever.

The board has recommend a 30.7 percent rise in dividend payout from Sh1.95 per share to Sh2.55 on the back of the increased profit. This will amount to Sh2.1 billion.

The net earnings makes I&M the fourth most profitable bank in Kenya after KCB (Sh25.1 billion), Equity (Sh22.6 billion), and Cooperative Bank (Sh14.3 billion). Standard Chartered comes fifth at Sh8.2 billion.

Shareholders will however wait given that the coronavirus pandemic has pushed government to suspend gatherings such as annual general meeting (AGM) which are usually used to vote on dividend decision.

“The company, having taken note of the press statement issued by the Capital Markets Authority that AGMs scheduled for the period March to May 2020 be deferred, will advise the date of AGM later,” said the board.

Non-interest income rose by 9.1 percent to Sh8.28 billion to more than compensate for a 0.54 percent fall in net interest income to Sh15.5 billion.

The review period saw operating expenses fall by 17.8 percent to Sh10.1 billion, taking pressure off the bottom-line.

The decline in expenses was majorly on account of 83.3 percent cut in loan loss provision from Sh3.8 billion to Sh636.4 million. This was in the period that gross non-performing loans eased 5.5 percent to Sh21.3 billion.

I&M Bank joined the class of large banks in 2018 after its market share grew by 0.54 percentage points, driven by new business from its acquisition of Giro Bank concluded in 2017.

Its market share grew to 5.32 percent to rank ninth in 2018, surpassing the five per cent mark used by the Central Bank of Kenya (CBK) to classify banks as large industry players. Market share statistics for last year is not yet out.Kenyan commercial banks are classified into three peer groups using a weighted composite index that comprises net assets, customer deposits, capital and reserves, number of deposit accounts and number of loan accounts.A bank with a weighted composite index of five percent and above is classified as a large bank. A medium bank has a weighted composite index of […]

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