I&M profit hits Sh6.3bn on lending income rise

I&M Bank branch in Nyeri. FILE PHOTO | NMG Banking group I&M Holdings #ticker:I&M reported a 14 percent rise in net profit in the nine months ended September, helped by increased income from lending and transactions.

The Nairobi Securities Exchange-listed firm’s net earnings in the review period stood at Sh6.3 billion compared to Sh5.5 billion the year before.

This has seen it rank fifth in terms of absolute net profits after KCB Group #ticker:KCB which reported earnings of Sh19.1 billion, Equity Group #ticker:EQTY (Sh17.3 billion), Co-op Bank #ticker:COOP (10.8 billion) and NCBA (Sh7.7 billion).

I&M’s total interest income rose 7.1 percent to Sh19.1 billion as the loan book expanded 6.6 percent to Sh174.1 billion. The lender’s investments in securities including government bonds declined by nearly a quarter to Sh24.4 billion.

Non-interest income increased 14 percent to Sh6.3 billion, further supporting the profit growth. I&M’s share of profits from its Mauritius-based subsidiary Bank One stood at Sh604.1 million in the review period, down 4.7 percent from Sh634.5 million a year earlier.

I&M holds a 50 percent stake in Bank One whose other shareholder is CIEL Group that is based in Mauritius and the partners have owned the joint venture for years.

I&M’s total net earnings from its regional subsidiaries declined to Sh884 million from Sh980 million.

Besides Mauritius’s Bank One, I & M also operates banking units in Tanzania and Rwanda. It also owns insurance agency, brokerage and financial advisory units in Kenya and Uganda.

It reduced its loan loss provisions 31.5 percent to Sh1.2 billion despite its gross non-performing loans rising 8.9 percent to Sh24 billion.

The lower provisioning helped to hold down total operating expenses which barely budged at Sh8.2 billion.

Interest expenses increased 12.8 percent to Sh8.5 billion, partly reflecting the impact of a 13 percent rise in customer deposits to Sh236.2 billion.

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