I&M Group has channelled Sh1.9 billion into its operations in Tanzania and Uganda as part of efforts to strengthen their earnings and expand market share.

The decision comes after the regional lender recorded a 38 per cent growth in net profit to Sh7.7 billion for the six months ending June 30, up from Sh5.6 billion in the same period last year, largely supported by its Kenyan unit.

The subsidiaries in Uganda and Tanzania saw their share of the group’s overall net profit reduce to 24 per cent, compared to 26 per cent last year.

During the period, the Kenyan arm of the lender posted a 31 per cent profit growth.

The new injection, which is made up of both shareholder funds and debt, is aimed at boosting the regional units’ competitiveness and positioning them for bigger profit contributions in the future.

Of the total amount, Tanzania received Sh1.29 billion, split equally between Sh645 million in shareholder funds and a Sh645 million loan from a development financial institution.

The shareholder funds improved the core capital of the Tanzanian subsidiary, raising its single obligor limit (SOL). SOL, also referred to as the single customer limit, is a regulatory rule that caps the amount of credit a bank can issue to a single borrower or a group of related borrowers.

Uganda, which posted a 23 per cent rise in profits, received Sh645 million in shareholder funds.

Tanzania registered the fastest growth among the two, recording a 43 per cent increase in profits.

“We are still relatively small in our other subsidiary markets – Uganda and Tanzania – with under 2 per cent market share. We have significantly large opportunities in both Uganda and Tanzania and as we continue to build our businesses there, we expect that contribution to rise,” said I&M regional Chief Executive Officer Kihara Maina.

Currently, I&M is ranked seventh in Kenya with a 5.4 per cent market share, while in Rwanda it holds the fourth position with 11 per cent market share.