I&M gets Sh457m Dividend from Mauritius Subsidiary

Following the unit’s improved financial performance, I&M Group received a dividend of Sh457.6 million from its Mauritius subsidiary Bank One in November 2022.

Bank One, which is owned equally by the Nairobi Securities Exchange (NSE) and the Mauritian conglomerate CIEL Limited, announced a pay-out of 320 million Mauritian rupees (Sh915.2 million at current exchange rates) to its shareholders.

This equated to a share pay out of 21.97 rupees (Sh62.83).

“Pursuant to the board meeting held on September 7, 2022, a final dividend of MUR320 million (MUR21.97 per share) was approved for distribution as a dividend to shareholders and was paid in November 2022, out of retained earnings,” said Bank One in its annual report for 2022.

The lender paid out a dividend of MUR168 million (Sh480.5 million) in 2021, with I&M Group receiving Sh240 million.

This dividend, which was approved in November 2021, was only paid out in January 2022—when it was approved by the Bank of Mauritius—so it was recorded as income in 2022 on I&M’s books.

As a result, the Kenyan lender earned Sh697.6 million in dividend income from its Bank One stake in the fiscal year ended December 2022.

This week, I&M will release its full-year financial results, which will include the impact of this dividend income.

Bank One made a net profit of MUR493 million (Sh1.41 billion) last year, a 19% increase from MUR413 million (Sh1.18 billion) in 2021.

Profits were primarily driven by higher interest income following a rate increase in Mauritius earlier in the year, marking the second straight period of improved earnings following a sharp drop in 2020 due to the covid-19 pandemic.

Thus, despite a tougher-than-expected operating environment due to high inflation in Mauritius last year, the lender increased its dividend pay-out year on year.

In 2008, I&M acquired a 50% stake in Bank One, making it the lender’s first acquisition outside of Kenya.

In the aftermath of the pandemic, which increased credit risk for banks worldwide, I&M and CIEL invested an additional Sh793 million in the unit in 2020 to strengthen its capital position.

Borrowings totalling Sh1.5 billion supplemented the new equity capital.