The Group attributed this impressive growth to the continuing successful implementation of its iMara 2.0 strategy, which is now in its 3rd and final year, focusing on business growth, operational efficiencies, customer centricity and digital transformation.
As a result of the strong performance, the Board proposed a total dividend of Ksh2.25 per share, a 50 percent increase from last year, bringing the total dividend payout to Ksh3.7 billion and a dividend yield of 13 percent.
I&M Group recognized the good growth on top line numbers made by I&M Bank Tanzania on the back of a robust increase in customer deposits and loans.
Net Loans and Advances grew by 6 percent to 366bn/- from 345bn/- in 2021 driven by corporate, mortgage and digital loans.
The bank’s customers’ deposits grew by 37 percent to 450bn/- from 329bn/- prior year, driven by corporate and retail customers. Net Interest Income increased by 26 percent to 31.8bn/- from 25.3bn/- prior year and Non-Funded Income increased by 24 percent to 11.6bn/ from 9.4bn/- in 2021.
Despite the loss that I&M Bank Tanzania reported in the year 2022, the Bank has for the past five years, reported an improvement in performance, with total assets growing by 17 percent in 2022 to 597bn/- from 511bn/- prior year.
Commenting on the performances, Zahid Mustafa, CEO of I&M Bank Tanzania said “The reported loss of 13.5bn/- in 2022 for I&M Bank Tanzania stemmed from a decision to write-off and take provisions on legacy Non-Performing Loans (NPL) in line with the Bank of Tanzania (BOT) guidelines. The NPL was driven by the adverse impact of the COVID pandemic, global inflation and the difficult operating environment impact on our customers. This saw increased provision of loans from 5.2bn/- in 2021 to 25.3bn/- in 2022”.
Mustafa who joined I&M Tanzania late last year, further stated that the bank has plans to diversify its business by introducing differentiated retail and digital banking propositions for its customers in Tanzania, improving customer experience, enhancing operational efficiencies and expanding the customer base to drive growth which requires significant investments in people and technology.
To this end, the Group has injected capital of US$6 million in the first half of FY2023.
Mr Mustafa emphasized that I&M Bank remains committed to its customers and the country with sound underlying business fundamentals derived from the Group’s iMara 2.0 strategy to drive growth, supported by a strong Group balance sheet and capital structure.
“The bank is compliant with regulatory provisions and remains confident that its strategy will continue to deliver better results for its customers and shareholders now and into the future”, said Mr Mustafa.
“We are on track to launch new ventures in both the corporate and retail space like the revamp of our employee banking proposition and digital platforms with the introduction of an agency banking platform dubbed ‘WAKALA’,” he said.
In the next five years, I&M Bank expects to graduate into a first-tier lender driven by balance sheet growth underpinned by profitable growth in the customer base, product expansion and operational efficiency.
I&M Bank (TZ) optimism is buoyed by the overall potential of the banking industry in Eastern Africa with promising growth on the back of the attractiveness of the industry.
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