M Oriental Bank has reported improved half-year results for the period ended 30 June 2025, with profitability improving but asset quality and capital ratios showing pressure.
- •Profit after tax rose 19.2% year-on-year to KSh 93.1 Mn, up from KSh 78.1 Mn in 2024.
- •Profit before tax grew 12.3% to KSh 122.8 Mn, supported by lower loan loss provisions, which fell to 30 Mn from KSh 70 Mn.
- •The lender is set to issue additional shares as it seeks to bolster its capital base in line with new requirements.
Net interest income increased 4.2% to KSh 346.1 Mn, driven by higher returns on government securities, though interest from loans slipped.
Non-interest income dropped 18.4% to KSh 73.3 Mn as foreign exchange trading income weakened. Operating income was flat at KSh 419.4 Mn against KSh 422.1 Mn a year earlier.
Expenses eased 5.2% to KSh 296.6 Mn, reflecting reduced provisions and tighter cost management, though staff costs rose.
| Metric | Jun 30, 2025 | Jun 30, 2024 | YoY % |
|---|---|---|---|
| Net Interest Income | 346.1 Mn | 332.2 Mn | 4.2% |
| Non-Interest Income | 73.3 Mn | 89.8 Mn | -18.4% |
| Operating Income | 419.4 Mn | 422.1 Mn | -0.6% |
| Loan Loss Provisions | 30.0 Mn | 70.0 Mn | -57.1% |
| Operating Expenses | 296.6 Mn | 312.8 Mn | -5.2% |
| Profit Before Tax (PBT) | 122.8 Mn | 109.3 Mn | 12.3% |
| Profit After Tax (PAT) | 93.1 Mn | 78.1 Mn | 19.2% |
| Total Assets | 14.33 Bn | 13.04 Bn | 9.9% |
| Total Equity | 3.60 Bn | 3.41 Bn | 5.6% |
| Customer Deposits | 10.49 Bn | 9.45 Bn | 11.0% |
| Loans & Advances (Net) | 7.15 Bn | 5.95 Bn | 20.2% |
| Gross NPLs | 2.05 Bn | 1.67 Bn | 22.8% |
| Core Capital | 2.51 Bn | 2.59 Bn | -3.3% |
The balance sheet expanded 9.9% to KSh 14.33 Bn, supported by an 11% rise in customer deposits to 10.49 Bn.
Net loans advanced 20.2% to KSh 7.15 Bn. Equity grew 5.6% to KSh 3.60 Bn. Gross non-performing loans increased 22.8% to KSh 2.05 Bn, lifting net NPL exposure to over 700 Mn.
Capital Requirements and EGM
Core capital slipped 3.3% to KSh 2.51 Bn, with core capital to risk weighted assets declining to 19.37% from 28.48%.
The drop in core capital leaves the bank below the Central Bank of Kenya’s new phased minimum requirement of KSh 3 Bn that takes effect by end-2025, up from the current KSh 1 Bn. M Oriental must raise at least KSh 490 Mn in additional capital this year to comply with the regulatory threshold.
To address this, the bank has convened an Extraordinary General Meeting on 5 September 2025. Shareholders will vote on authorizing the allotment and issuance of up to 50 million new ordinary shares of par value KSh 20 each over a five-year period. The move, if approved, is aimed at providing flexibility for capital raising to meet CBK’s rising capital adequacy demands.
