Regional expansion, digital delivery behind I&M Group PLC's 33% after tax profit growth in half year 2021

Regional Financial Services Group, I&M Group PLC has announced an increase of 33% after tax profit for its 2021 half year financial results up from UGX 102.5 billion to UGX 134.6 billion.

The Group’s Total Assets recorded a growth of 12% to close at UGX 12.2 trillion up from UGX 10.9 trillion in June 2020 bolstered by expansion into Uganda and increased private and public sector lending.

The acquisition of Orient Bank Ltd (OBL) in Uganda has expanded the Group’s balance sheet by UGX 753 billion as at the reporting date.  Net interest income recorded strong growth of 28% to UGX 285.2 billion up from UGX 221.1 billion in June 2020 attributed to increased interest income from government securities.

The Group’s total Non-Funded Income reduced by 6% to UGX 124.9 billion from UGX 134.6 billion. Net non-performing loans reduced by 8% compared to June 2020, to close at UGX 240.3 billion attributed to strengthened remedial actions in improving the loan book quality. Customer deposits recorded a 10% growth from UGX 8.09 trillion in June 2020 to UGX 8.87 trillion as at June 2021.

Commenting on the Group's financials, Mr. Daniel Ndonye, I&M Group PLC Chairman confirmed that the Group’s focus on increased lending to both the private and the public sector was key in determining the bank’s growth at a time when economies world over were hard hit by the effect of the COVID-19 pandemic. 

This is on the back of strong capital and liquidity base at group and country levels reported all well above regulatory minimums. At Group level, capital adequacy ratios closed at 21% at the same level as previous year, while liquidity ratio was 48% well above the statutory minimum of 20%.

The period under review saw the Group finalise the acquisition of a 90 percent shareholding in Uganda’s OBL.

This is part of the Group’s broader regional expansion strategy to serve the needs of all customers at local and regional level, while promoting trade flows within the region.

“We will continue to focus on our customers across all the banking segments through a series of products and innovations that are tailored to enhance customers banking experience across all our subsidiaries;” he added

Key to note, the Group, during the period under review, also rolled out, through its wholly owned subsidiary, I&M Capital Limited, a host of Wealth Management solutions. This is expected to boost revenue diversification through provision of customized investment solutions, Asset Management, Retirement Income and Financial Planning for high network individuals.

Additionally, the Rwandan and Tanzanian subsidiaries launched Whatsapp banking, a key milestone in the Group’s digital transformation journey to provide customers with freedom of modern banking.

“We will also continue to invest and offer cutting edge technologically driven solutions to our customers and expand opportunities to attract more investors,” Mr. Daniel Ndonye concluded.

The Group’s Executive Director, Sarit Raja Shah underscored significant investment made during the first half of 2021.

“Along with innovation of market driven solutions, we have also made significant investments in new systems across the Group in a bid to increase operational efficiencies and improve our customers’ banking experience.

” Further, the Group progressed on its strategic effort to create long-term value for stakeholders, through continued investments in Environmental, Social and Governance initiatives as a means to building resilience as well as to mitigate against emergent operational, cyber and credit risk.

During the period under review, the Bank invested in a new Risk Management infrastructure for Anti-Money Laundering, Operational Risk and Fraud Management, as a key step in protecting its customers from the threat of financial crime on the Bank’s systems.

Through the I&M Foundation, the Group collaborated with like-minded organisations to drive its shared growth agenda in key thematic areas namely: Education and Skills development, Environmental Conservation, Economic Empowerment and Enabling Giving. Key to note was that the Foundation partnered with the Kenya Community Development Foundation to drive environmental conservation initiatives spearheaded by the youth in Narok and Kilifi counties.

The Foundation continues to support education scholarships for bright but financially constrained students at Strathmore University and the Palmhouse Foundation. Additionally, the Foundation donated towards the Maa Trust’s Mau Bead-Work project, to cushion the Trust’s beneficiaries from the impact of the COVID-19 pandemic.

Meanwhile, the Group’s Rwanda and Mauritius entities received accolades during the period under review. I&M Bank (Rwanda) PLC was recognized as the best bank (2021) by Capital Finance International (CFI.co), a print and online journal reporting on business, economics and finance. The Award recognized the Bank’s product offering, strategy, short-term and medium growth plans as well as client diversity.

The Bank was also recognized for its technological innovations such as Near Field Communication (NFC) enabled ATMs with contactless technology enabling for operational efficiency and enhanced user experience.

The Awards judges’ report also heralded the Bank’s growth strategy driven by a three pillar approach – driving business, building resilience, and optimizing the operating approach. In addition, the Mauritius joint venture, Bank One Limited, was awarded the Best Bank in International Banking Services and Best Custodian Bank, wherein the Bank was recognized for its role in supporting businesses in Sub-Saharan Africa based on its unique onshore and offshore capabilities.