Banking services group, I&M Bank Limited has announced a 9% after tax profit growth for its 2016 full year trading results.
Speaking following the release of the results, I&M Bank Kenya Chief Executive officer, Mr. Kihara Maina noted the results were largely satisfactory given the severe operating environment the industry as a whole was facing.
He further pointed out that the core banking business of intermediation involving the pricing of risk was considerably impacted by the interest rate corridor which makes it a challenging environment for both customers and the bank.
While the group assets registered an impressive growth of 10.3 percent to close at Kshs 182.1 billion up from Kshs 165 billion, the firm’s pre-tax profit recorded a marginal rise of 3% growth to close at Kshs 9 billion up from Kshs 8.7 billion posted the previous year.
Increased customer lending accelerated the firm’s loan and advances book to Kshs 120.7 billion up from Kshs 114.9 billion representing a 5% growth. The Group’s interest income generated from customer loans and advances including placements on government securities increased by an 11% margin to close at Kshs 21.7 billion up from Kshs 19.6 billion posted the previous year.
The Group’s interest expenses however dropped by 5% to close at Kshs 8.2 billion down from Kshs 8.6 billion, primarily due to stability in interest rates. The deposit base grew by 11% to Kshs 129.6 billion.
On strategic direction of the Bank, Mr Maina pointed out that the bank was in the middle of undertaking comprehensive structural re-alignments to position the Group for future growth. He further added that, I&M Bank would take a cautious, informed approach in the way it reacts to the recent changes in laws affecting its business.
“We are pursuing several strategic initiatives that we believe will place the Bank in a better position to counter the various challenges arising from the current operating environment whilst taking advantage of existing opportunities as we endeavour to increase our shareholders’ value”, Maina said.
On the recent acquisition of former Giro Commercial Bank Limited (GCBL), the CEO added that the integration process of the two businesses is progressing well and plans have been finalised to ensure a smooth customer transition. GCBL will add on a proforma basis net advances of approximately Kshs 9.1 billion and deposits of Kshs 12.6 billion. I&M Bank has also acquired Giro Bank’s branch network, effectively pushing its branch footprint to 43 branches in Kenya.
Last year, I&M Bank Limited continued to expand its product portfolio by launching various products in line with the bank’s pillar on innovation. The bank launched I&M Karibu Account, a technology driven product, that enables real-time account opening through self-registration on the I&M App and at approved at I&M Karibu Agents. I&M Bank is also a pioneer member of the industry’s PesaLink system, a payments solution enabling I&M Bank customers to directly pay another bank’s customer in Kenya in real time, affordably and conveniently, through its branches and alternate delivery channels like mobile and internet banking.