By The Rio Times | Created at 2026-08-28 08:01:47 | Updated at 2026-09-05 02:53:09
1 week ago
KENYA · BANKING
Key Facts
—The headline: I&M Group reported profit after tax of Sh10.2 billion for the six months to 30 June 2026, up 22 percent. Total operating income rose 23 percent to Sh33.7 billion.
—Where it came from: Pre-tax profit in Kenya was flat at Sh8.3 billion. Rwanda rose 53 percent to Sh2.4 billion and Uganda rose 225 percent to Sh700 million.
—Balance sheet: Net loans and advances grew 15 percent to Sh334 billion and customer deposits 18 percent to Sh505 billion. Total assets rose 27 percent to Sh746 billion.
—Bad loans: Gross non-performing loans fell 12 percent to Sh30.1 billion from Sh34.4 billion. The net non-performing loan ratio improved to 2.3 percent from 4.1 percent.
—The provision paradox: Loan-loss provisions still rose 38 percent to Sh5.6 billion. In Kenya alone they were up 34 percent at Sh4.2 billion.
—Digital: Financing disbursed through digital channels reached Sh15.7 billion. Digital and ecosystem business now makes up 21.7 percent of retail and business banking operating income, from 14 percent.
—The share: The stock closed June at Sh69.50 against Sh42.45 at the start of the year. That is a gain of about 64 percent in six months.
I&M Group made Sh10.2 billion after tax in the first half of 2026, a rise of 22 percent, and almost none of the additional profit came from Kenya. Rwanda and Uganda did the growing while the Kenyan bank held flat and set aside more against bad debt.
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What the I&M Group results show
The lender published half-year figures at an investor briefing in Nairobi on Thursday 27 August, reported by The Star. Profit after tax reached Sh10.2 billion, up 22 percent, on total operating income of Sh33.7 billion.
The balance sheet grew faster than the profit. Total assets rose 27 percent to Sh746 billion, deposits 18 percent to Sh505 billion and net loans 15 percent to Sh334 billion.
Asset quality improved on the headline measure. Gross non-performing loans fell 12 percent to Sh30.1 billion and the net ratio dropped to 2.3 percent from 4.1 percent.
Kenya is flat, and that is the story
Pre-tax profit in Kenya came in flat at Sh8.3 billion. Every point of group growth was earned somewhere else.
Rwanda lifted pre-tax profit 53 percent to Sh2.4 billion and Uganda rose 225 percent to Sh700 million, from a small base. Tanzania added 8 percent to Sh600 million, while Bank One in Mauritius slipped 3 percent to Sh900 million.
The group says non-Kenyan units now contribute 33 percent of pre-tax profit, up from 25 percent. Those named subsidiary figures add to Sh4.6 billion against Kenya’s Sh8.3 billion, which is nearer 36 percent, so the published split is presumably struck after holding-company costs.
Better ratios, bigger provisions
The apparent contradiction in the numbers is worth pausing on. Non-performing loans fell, yet loan-loss provisions rose 38 percent to Sh5.6 billion.
The increase is concentrated in Kenya, where provisions were up 34 percent at Sh4.2 billion. The bank attributes this to domestic economic conditions and geopolitical uncertainty.
Provisioning ahead of losses is not a warning sign in itself. It usually means management is either cleaning up faster than the ratios suggest or expecting the environment to worsen.
The coverage question follows from that. A bank that lifts provisions while bad loans fall is building a larger cushion against a smaller problem, which is the conservative choice.
The regional bank thesis, tested
East African lenders have spent a decade arguing that the way past a saturated Kenyan market is to build in Rwanda, Uganda and Tanzania. These results are the clearest read on that argument in some time.
Rwanda is now the second-largest profit contributor in the group. Uganda more than tripled its contribution, although from a base small enough that the percentage flatters it.
Bank One in Mauritius is the outlier in the set. It slipped 3 percent to Sh900 million, and Mauritius is a different business from the East African units, weighted towards offshore and structured finance.
The risk of the strategy is the same as its promise. Smaller markets grow faster and they turn faster, and a 225 percent gain can reverse at the same speed.
What it means for anyone holding the shares
The stock has already re-rated hard. It closed June at Sh69.50 against Sh42.45 at the start of the year, a gain of about 64 percent in half a year.
Deposit growth is the number to keep an eye on. Deposits rose faster than loans, which usually means a bank is gathering funding ahead of the lending it expects to do.
Small business lending is the other engine. Revenue from that segment rose 41 percent, and digital and ecosystem business now accounts for 21.7 percent of retail and business banking income, up from 14 percent.
Kihara Maina, the regional chief executive, attributes the result to disciplined execution of the group’s diversification strategy. Chief financial officer David Ngata presented alongside him.
This is company reporting rather than investment advice, and half-year figures are unaudited. Anyone acting on them should read the published results in full.
Frequently Asked Questions
How much did I&M Group make in the first half of 2026?
Profit after tax was Sh10.2 billion, up 22 percent on the same period a year earlier. Total operating income rose 23 percent to Sh33.7 billion.
Which markets drove the growth?
Rwanda lifted pre-tax profit 53 percent to Sh2.4 billion and Uganda rose 225 percent to Sh700 million. Kenya was flat at Sh8.3 billion.
Did asset quality improve?
Gross non-performing loans fell 12 percent to Sh30.1 billion and the net ratio improved to 2.3 percent from 4.1 percent. Loan-loss provisions still rose 38 percent to Sh5.6 billion.
How has the share performed?
It closed June at Sh69.50 against Sh42.45 at the start of the year. That is a gain of about 64 percent over six months.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
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