The benefits of Orient Bank’s acquisition and subsequent rebranding to I&M Bank Uganda and thereafter integration into the larger I&M Group Plc are unfolding with the bank’s release of its first full year under the I&M brand.
In results released today, the bank reported an 8.9% jump in customer deposits from UGX573.7 billion to UGX624.6 billion in 2022, reversing a 2-year declining trend in which deposits reduced from an all-time high of UGX673.5 billion in 2019 to UGX573.7 billion in 2021.
Riding on a boost in customer deposits, the bank drove a 19% jump in lending⏤ from UGX196.8 billion to UGX234.1 billion in 2022, an increase of UGX37.3 billion. The previous year (2021), the bank had scaled down on lending, from UGX262 billion in 2020 to UGX196.8 billion in 2021. But now, with the increased lending, the bank’s total income grew 10.1% from UGX77 billion to UGX84.8 billion.
Income growth, coupled with a 40% reduction in expenditure⏤ from UGX113.5 billion in 2021 to UGX68 billion in 2022, heralded by a reduction in a massive reduction in provisioning for bad debts, saw the company recover from a UGX22.9 billion loss in 2021 to a profit of UGX5.6 billion.
Thanks to the turnaround performance, total assets grew by 10.7%, from UGX710.4 billion to UGX786.5 billion, a growth of UGX76.1 billion.
The I&M Group majority-acquired Orient Bank in mid-2021 and in November of the same year, rebranded it with a promise to unlock the bank’s full potential and reach out to more customers with new products and a new customer experience.
Over and above the rebranding, the bank has undergone significant transformation, restructuring and alignment of its operations, people, products and processes, with a significant shift to digitalisation in line with the I&M Group Plc’s Imara 2.0 strategy.
The transformation that started in early 2021 saw an overhaul of senior executives, bringing in a new team of 15 new executives, the top of which was the appointment of Sam Ntulume, a respected and experienced banker as Executive Director and Chief Operations Officer.
A solid bank
In a commentary accompanying the results, Sam Ntulume the Ag. Managing Director & CEO and Suleiman I. Kiggundu, the Board Chairman reassured stakeholders of the shareholders’ commitment to keep the bank solid.
“On 16 November 2022, the Minister of Finance Planning and Economic Development in consultation with the Bank of Uganda endorsed a new statutory instrument requiring commercial banks to have a minimum paid-up cash capital (share capital) of UGX 120 billion by 31 December 2022, and UGX 150 billion by 30 June 2024. The instrument also stipulated minimum capital funds unimpaired by losses (core capital) of UGX 120 billion by 31 December 2022, and UGX 150 billion by 30 June 2024. As of 31 December 2022, the Bank’s minimum paid-up cash capital was UGX 150 billion and therefore complied with the revised capital adequacy requirements as of 31 December 2022 and 30 June 2024. However, the Bank’s core capital was UGX 69 billion, resulting in a shortfall of UGX 51 billion. The shareholders are committed to providing the necessary capital to strengthen the bank’s capability to carry out its operations within the regulatory timelines,” the duo wrote.