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I&M injects Sh1.9bn in Tanzania, Uganda units in profit drive
I&M Bank Plc Regional CEO Kihara Maina makes his remarks during the banks release of the 2024 Financial Results (FY2024) at the Stanley Hotel on March 26, 2025.
Photo credit: Francis Nderitu | Nation Media Group
The I&M Group has injected Sh1.9billion in fresh capital into its Tanzania and Uganda operations in a bid to boost their profit contribution to the business.
This came even as the regional tier-one lender reported a 38percent growth in net profit for the six months ended June 2025 to Sh7.7billion, up from Sh5.6billion a year earlier, riding on a strong performance by its Kenyan unit.
Contribution by the bank’s regional subsidiaries to the group’s net profit dropped to 24 percent from 26 percent a year ago, following a 31 percent profit growth by the Kenyan unit in the period under review.
The listed lender disclosed it had injected Sh1.9 billion in Tanzania and Uganda, being a mixture of shareholder funds and debt.
Tanzania, which posted the fastest growth in profits of 43 percent, received Sh1.29 billion, with Sh645 million being shareholder funds, while Sh645 million was a loan from a development financial institution.
The funds from the shareholders improved the core capital position of the Tanzania unit, improving its single obligor limit (SOL). SOL, which is also known as the single customer limit,is a regulatory restriction that limits the total amount of credit a financial institution can extend to a single borrower or a group of related borrowers.
Uganda, with a 23 percent profit growth, received Sh645 million, which was shareholder funds.
“We are still relatively small in our other subsidiary markets – Uganda and Tanzania - with under two percent market share. We have significantly large opportunities in both Uganda and Tanzania, and as we continue to build our businesses there, we expect that contribution to rise,” said the bank's regional Chief Executive Officer, Kihara Maina.
I&M is ranked seventh in Kenya with a 5.4 percent market share and fourth in Rwanda with an 11 percent market share.
Kenya was the largest profit contributor, posting a profit of Sh5.7 billion, followed by Rwanda at Sh1.6 billion, Mauritius (Sh890 million), Tanzania (Sh580 million), and Uganda at Sh210 million.
Decline in cost of funds was the key driver of I&M’s profits, with interest expenses down 20.2 percent to Sh11.6 billion from Sh14.6 billion a year earlier.
Interest paid to customers dropped by Sh2.1 billion to Sh9.8 billion despite the deposit base growing marginally, 2.3 percent, to Sh429 billion, signaling declining interest rates in the region.
The bank reduced its borrowed funds after repaying a Sh3.5 billion medium-term note, lowering interest expenses.
I&M loan book grew 2.1 percent to Sh290.5 billion, underscoring a cautious approach in lending at a time when the banking industry is struggling with bad loans. Notably, I&M reported a drop in its stock of bad loans to Sh34.3 billion from Sh34.8 billion. Management attributed the drop to aggressive collection across the region.
“We've had very good recoveries happening in our Tanzania and Uganda market, and while we've seen a bit of a tick up in Rwanda and Kenya, there's still a lot of good work happening in our recovery,” said Mr Kihara.
I&M's change of strategy to deepen presence in the retail market has seen its customer base grow by 34 percent in the 12 months ended June to 851,000 customers.
The group has increased its branch network in the region to 110 from 97, while also investing in technology to enable it to onboard new products such as short-term digital loans to serve the new clientele.
