Investments & Mortgages Bank (I&M Bank) has repositioned itself in the Kenyan market with a challenger-led strategy, moving away from its traditional corporate banking focus to prioritise higher-growth retail and small and medium-sized enterprise (SME) segments. These segments are defined by high transaction volumes, rising digital engagement and demand for flexible financing. The shift reflects a broader strategy to move beyond scale-driven banking and embed the institution more deeply into day-to-day financial activity. The aim is to improve accessibility while delivering more relevant, digitally-enabled services. Shameer Patel, director of retail and business banking at I&M Bank, said the strategy is anchored in being “sharper, faster and more customer focused,” reflecting the bank’s transition towards a more agile universal banking model. He added that the institution “took a decision to pivot, to become a more universal bank and grow in retail and SME.” Kenya’s banking sector is undergoing rapid digital adoption driven by widespread use of mobile money, which has changed how individuals and businesses interact with financial services. Customers increasingly expect real-time, low-cost and intuitive solutions, while growth in the SME segment is driving demand for more flexible products. This is forcing banks to align more closely with evolving customer behaviour. This strategic shift is already visible in performance. In 2025, I&M Bank reported a 28% increase in profit before tax to KES 17.3 billion (about $130 million), supported by a 22% rise in operating income to KES 40.4 billion (about $310 million). Growth was mainly driven by a 41% expansion in non-interest income and a 49% expansion in the customer base, indicating stronger transaction activity and improved acquisition across retail and SME segments. Operating expenses rose by 18%, as the bank continued to invest in distribution, brand and capabilities. However, revenue growth outpaced costs, suggesting early operating leverage from the bank’s transformation programme. Balance sheet trends reinforced the momentum. Total assets increased by 11% to KES 460 billion (about $3.5 billion), supported by a 15% growth in customer deposits to KES 348 billion (about $2.7 billion), strengthening the funding base. Lending growth remained modest, with net loans up 1% to KES 218 billion (about $1.7 billion). Asset quality improved, with gross non-performing loans falling to 13.3% from 14.3%, reflecting disciplined risk management during expansion. Hybrid model supports customer acquisition at scale In Kenya, digital adoption is accelerating, but trust in financial services remains closely tied to physical presence. This creates a dual operating environment in which digital channels drive accessibility and scale, while branch networks continue to anchor credibility, particularly in new and emerging customer segments. Against this backdrop, I&M Bank has adopted a hybrid distribution model combining digital capabilities with continued investment in physical branch expansion to accelerate customer acquisition. As Patel noted, “In Kenya, trust is still closely tied to physical presence, and digital complements the physical, and vice versa.” The interplay between the two channels is shaping customer engagement. Patel added that opening a branch in a new location often triggers a noticeable increase in digital activity, reinforcing the role of physical presence in building trust. This model has enabled faster scaling of customer acquisition by combining reach with conversion efficiency. Onboarding volumes have increased significantly, with what the bank onboarded in 2021 now achieved in a single month. This underscores the effectiveness of a distribution strategy that is closely aligned with local market dynamics. Kenya’s mobile money landscape Mobile wallets play a central role in Kenya’s financial system, shaping how customers store, transfer and access funds. As a result, banks face persistent pressure to retain balances that are frequently moved between wallets and traditional accounts depending on usage needs. To address this, I&M Bank removed transaction charges between bank accounts and mobile wallets for retail customers. This reduces friction and helps retain funds within the bank’s ecosystem while aligning more closely with how customers manage and move money. Instead of withdrawing larger balances in advance of spending, customers can now retain funds within the bank and transfer smaller amounts as needed. This has increased transaction frequency and strengthening account utilisation. The approach has also been extended to micro and sole proprietors, reflecting the overlap between personal and business finances in the local market. By enabling seamless movement between personal and business accounts, the bank has aligned its proposition with real-word usage patterns and strengthening its position within the broader financial ecosystem. The approach has also been extended to micro and sole proprietors, reflecting the close overlap between personal and business finances in the local market. By enabling seamless movement between personal and business accounts, the bank is aligning its proposition with real-world usage patterns and strengthening its position within the broader financial ecosystem. Digital transformation drives transaction growth and efficiency Digital transformation has been a central enabler of I&M Bank’s strategic expansion. Structured as an internal incubation model, the bank has shortened development cycles and accelerated product rollout, enabling faster response to customer demand. As Patel explained, the objective was to move away from long project cycles towards agile delivery focused on speed and impact. Under the bank’s iMara 3.0 strategy, digitisation enabled a shift towards a more standardised and centralised operating model. This has reduced execution complexity and accelerated product rollout across segments. Execution is supported by targeted investments in brand, group synergies, business resilience and digitisation, enabling stronger digital capability, and improved operational efficiency. This is reflected in improvements in efficiency and customer acquisition, with onboarding time reduced from one day to around five minutes, leading to higher volumes and pushing digital onboarding to around 80%. At the same time cost to serve declined by up to 72%, while customer acquisition costs improved by 44%. As Patel noted, “We’ve brought onboarding down to five minutes and reduced our cost to serve substantially.” Looking ahead, the bank’s growth trajectory will depend on its ability to adapt quickly to changing market dynamics, leveraging digitisation, hybrid distribution and payments integration. By strengthening both transaction flows and customer engagement, I&M Bank is positioning itself to scale through faster execution and more efficient customer acquisition.
