I&M Holdings half-year pre-tax profit up 27pc

I&M Holdings, the non-operating holding company of I&M Bank Group has reported a 27 per cent growth in profit before tax for the first six months this year.

The lender saw its pre-tax profit jump to Sh4.8 billion compared to the Sh3.8 billion recorded in the same period last year, buoyed by earnings from interest on loans. Net profit increased to Sh3.3 billion in the first six months of this year compared to Sh2.5 billion recorded in the same period last year.

I&M Bank CEO Arun Mathur attributes the increase to controlled growth and prudent risk management in its expansion strategy in the country and across the region. The lender’s net interest income - what it earned from charging interest on customer loans - grew to Sh5.89 billion compared to Sh4.9 billion in June 2014.

However, Mathur said the operating environment was difficult due to the volatility in the money markets. He said this uncertain economic scenario contributed to a 25 per cent increase in net impairment losses to Sh467 million.

Loans and advances stood at Sh123 billion, a 20 per cent jump with customer deposits increasing by 22 per cent to close at Sh129 billion. I&M grew its total assets to Sh189.3 billion, which is 20 per cent growth compared to last year.

Steady growth

Mathur said the lender continues to enjoy strong relationships with key international development financial institutions that have extended medium-term credit lines amounting to Sh15 billion as at June 2015.

“The Group’s subsidiaries in Tanzania and Rwanda as well as the joint venture in Bank One, Mauritius, continued to register steady growth in assets and profitability,” Mathur added.