I&M earnings up by a third to Sh2.2bn in quarter one

Banking group I&M Holdings’ #ticker:I&M net earnings in the first quarter ended March rose by a third, helped by reduced expenses and higher income from lending and transactions.

The Nairobi Securities Exchange-listed firm made a net profit of Sh2.2 billion in the review period, up from Sh1.7 billion a year earlier.

This came as interest income rose 8.8 percent to Sh6.1 billion while non-interest income including fees from forex trading increased 9.7 per cent to Sh2 billion.

The company received Sh283.6 million as its share of earnings from its 50 per cent stake in Mauritius-based Bank One Limited, a move that contributed significantly to growing the bottom-line.

I&M’s share of profit from the subsidiary stood at Sh122.5 million a year earlier.

The lender also benefitted from a 10.9 percent decline in operating expenses to Sh2.4 billion. This was partly caused by loan loss provision falling 65.5 percent to Sh199 million despite the stock of gross defaults rising 6.1 percent to Sh23.7 billion.

The lender’s interest expense surged 18.2 percent to Sh2.7 billion, partly reflecting the impact of a 28.8 percent jump in customer deposits to Sh221.1 billion.

I&M’s loan book expanded 10.6 percent to Sh168.9 billion while its investment in Kenya government’s debt paper rose by a quarter to Sh31.6 billion, helping to boost interest income.

At 33.4 percent, I&M’s profit growth is the highest among the big banks that have reported their first quarter results.

Standard Chartered Bank (Kenya) reported a 31.1 per cent net profit jump to Sh2.4 billion in the review period, helped by lower costs. The lender, for instance, cut its loan loss provision by Sh650 million to Sh415.1 million, pulling total operating expenses down 11.7 percent to Sh3.8 billion.