I&M Bank Rwanda first quarter net income surged by 120 percent reaching Rwf4.8 billion, year on year, according to data published by the lender.
According to the financials published by the bank, the growth was driven by sustained positive performance across all our business segments. “We continue to maintain a strong risk profile with a stable cost of risk and a declining Non-Performing Loan ratio. We maintained a prudent funding and liquidity position and strong capitalization with Capital Adequacy Ratios and Tier 1 ratios of 18.2 percent and 16.8 percent respectively,” the lender said in a statement.
The strength of the Bank’s performance was reflected in all profitability metrics, with return on equity and return on asset increasing at a record 23.83 percent and 2.91 percent respectively, while Net interest income grew by 46 percent, primarily driven by the growth of loans books by 29 percent and continuous investment in securities.
Data published by the bank indicate net fees and commission income increased by 403 percent year-on-year on success of our products diversification and foreign currency trading profits surged by rose percent year-on-year, driven by a higher volume of foreign exchange transactions.
Strategic investment in people rose the operating expenses by 6 percent year-on-year, with a 19 percent increase in staff costs due to human capital development. This investment was offset by a decrease in other operating expenses.
Prudent provisioning led to a 186 percent rise in impairment charges, reflecting our proactive approach to managing credit risk while the Bank’s loan portfolio was maintained at Rwf312 billion with a year-on-year growth of 29 percent reflected in all business segments. The positive momentum was extended to asset quality, with the gross NPL ratio falling to a healthy 2.07 percent from 2.4 percent in December 2023.
Additionally, the Bank has maintained a healthy level of liquidity positions, with a total loan to deposits ratio of 63.8 percent and the liquidity coverage ratio reaching 327 percent, ensuring adequate liquidity to meet obligations.
The deposit base witnessed strong growth in Q1 2024, surging by 41 percent to reach Rwf529 billion as of March 31, 2024. Shareholders’ funds grew 6 percent, driven by a strong 9 percent increase in retained earnings to Rwf60 billion.
“The implementation of our new Bank strategy is already demonstrating positive results. We are solidifying our presence in core market segments while actively pursuing exciting opportunities in emerging markets,” I&M Bank Rwanda’s Managing Director, Benjamin Mutimura said.
Adding the combined approach ensures sustainable returns for our shareholders in the long term.
The Bank’s three business segments, Corporate, MSME, and Retail Banking, experienced growth in their lending portfolios.
One notable highlight was the MSME segment, which saw a significant rise of 75 percent in loans and advances and a record 67 percent in deposits Year-on-Year. This achievement was supported by the implementation of leading digital transformation and innovative propositions like the ‘Agiserera’ and ‘Iyubake’ campaigns, which helped attract new customers.
For the Corporate Banking segment, data analytics enabled cross-selling contributed to a 33 percent increase in the deposits base Year-on-Year.
Our commitment to enhanced customer convenience, exemplified by dedicated MSME and Retail loan centers, has yielded great results. This is evidenced by a 20 percent and 75 percent growth in loans extended to retail and MSME customers, respectively.
Building on this success, we plan to scale up our MSME and Retail business centers, aligning with the new branch operating model. This expansion will allow us to better cater to the specific financing needs of these key market segments.
To fuel growth, we’re strategically expanding our branch network in Kigali, secondary cities, and relocating for market opportunities. An improved operating model empowers local decision-making, driving business activity and a more responsive customer experience.”
“Looking ahead, I&M Bank remains committed to supporting Rwanda’s economic development. We will execute strategic initiatives, including leveraging strategic partnerships, to drive lending in critical sectors like agriculture, women’s entrepreneurship, youth development, and renewable energy. This focus on sustainable growth aligns with our ambitious goal to positively impact over 2 million lives by 2026.” Mutimura added.
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