I&M Bank Rwanda net profit rose 45.9 percent in the third quarter supported by digitalisation, gains from domestic short term securities, interest on loans and advances to customers.

According to financial statements released on November 29, the lender made a profit-after-tax of Rwf5.4 billion ($5.37 million) from Rwf3.7 billion ($3.68 million) in the same period last year. Net interest income rose by 21 per cent or Rwf15.8 billion ($15.7 million) in the nine months to September, closing the period at Rwf20 billion ($20 million).

CEO Robin Bairstow told Rwanda Today that the adoption of digital channels to facilitate transactions helped boost the bank’s revenues, specifically non-funded incomes.

The bank has partnered with SPENN – a mobile blockchain-powered platform that allows for payment of good and services and transfers, and has helped recruit more than 345,000 customers onto the platform.

“At least 72 per cent of transactions (were) done digitally this year. Overall, this has translated in increased revenues,” said Bairstow.

I&M Bank’s digital products and services include initiation of international and local transfers on iClick, full Near Field Communications (NFC)-enabled merchant acquiring point of sale as well as ATMs that use the same technology.

“I&M Bank Rwanda has historically been at the forefront with new technologies in the banking sector,” said Bairstow.

However, the ambitious digitalisation is putting pressure on the bank’s revenues.

According to the financial statement the bank’s operating costs hit Rwf22.8 billion ($22.68 million) from Rwf15.8 billion ($15.7 million) partly driven by the heavy capital investment in automation.

The loan restructuring scheme aimed at reducing the burden of repayment for borrowers going through financial difficulties due to Covid-19 pandemic is also another challenge I&M Bank notes that as of end September 30, the lender had restructured loans totaling to Rwf57 billion ($56.8 million), about 20 per cent of gross loans.

Analysts say restructuring that comes with deferral of loan repayment, specifically the principal or interest, and in some cases both principal and interest, puts pressure on earnings.

Bairstow, however, says the deferment has helped businesses in Rwanda recover and the economy to start rebounding.

He adds that there is no direct impact on the bank’s operations on the short run.