The board of I&M Bank has recommended a dividend of Sh2.25 per share amounting to Sh1.9 billion to shareholders.

I&M Bank has joined the club of a few lenders this year which have declared dividend payout to shareholders despite seeing profit slump significantly.

In the lender’s financial results for the full year ended 2020, I&M Bank net profit dipped by 21.9 per cent to Sh8.4 billion from Sh10.8 billion recorded in the prior year 2019 attributable to loan-loss reserves that surged by 288.5 per cent to Sh2.5 billion.

I&M Bank’s total interest income increased by 2.5 per cent to Sh27.8 billion from Sh27.2 billion realized previously while the net interest income went up marginally 0.6 per cent to Sh15.6 billion.

“Operating costs however rose by 7 per cent, largely in line with inflation and reflecting the various investments under our iMara strategy ealier instuted by the bank in 2017,” said Group chairman Daniel Ndonye.

The asset base increased by 13.7 per cent to Sh358 billion up from Sh315 billion in the prior year.

Read also: Family Bank swings to 26 per cent profit growth in pandemic year

In a year that was marked by subdued business activity and massive job losses, I&M Bank’s loan and advances went up by 6.9 per cent year on year to Sh187.4 billion from Sh175 billion in 2019.

The gross non-performing loans, however, grew by 10.7 per cent to Sh23.6 billion from Sh21 billion, seeing the bank revise its loan loss reserves to Sh2.5 billion from Sh637 million in the year before.

“Our regulatory ratios have remained healthy. Our liquidity remained above 45 per cent throughout the year while the regulatory capital minimums held above the set regulatory limits and also our internally set thresholds,” said Mr Ndonye.

I&M’s investments in government securities climbed 101.5 per cent to Sh73.4 billion.

I&M Bank is set to expand into Uganda having announced last year the acquisition of Orient Bank, Uganda, a move that is subject to approval by authorities in the East African country.

The board has, however, recommended a dividend of Sh2.25 per share amounting to Sh1.9 billion to shareholders.

I&M Bank now joins competitors NCBA, Co-op Bank, KCB, Stanchart and Stanbic which have defied the hit caused by 2020 profit decline to declare dividend to their shareholders.

NCBA proposed to pay Sh1.5 per share while Coop Bank has offered to pay shareholders Sh1.5 apiece even as KCB proposed Sh1 per share down from Sh3.5 in prior year.

The board of Stanchart Bank proposed Sh10.5 dividend payout while Stanbic Bank is ready to pay out Sh3.8 per share to its shareholders.

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