, NAIROBI, Kenya, Sep 7 – I&M Holdings is set to acquire Giro Commercial Bank Limited (GCBL), a tier 3 bank subject to regulatory approvals.
The transaction value is yet to be disclosed. After acquisition, GCBL will be merged under I&M Bank, a subsidiary of I&M Holdings.
“I&M Holdings Limited is pleased to announce that it has signed an agreement to acquire all of the issued share capital in Giro Commercial Bank Limited.
“The proposed acquisition, upon completion, envisages the immediate merger of Giro’s banking business into I&M Bank Limited, IMHL’s flagship subsidiary,” the firm said in a statement.
GCBL has seven branches in Kenya (Nairobi, Mombasa and Kisumu) and has about 100 employees.
The bank customer base is primarily SME and retail and has over 9,000 customers.
According to the Central Bank of Kenya, GCBL had an overall market share of 0.49 percent as at 2014.
In its full year 2014, GCBL had net loans of Sh7.7bn with key sectors being real estate (26.3 percent of total loans), wholesale and retail (20 percent of total loans) and building and construction (13.2 percent of total loans).
The bank focuses on short term lending given that 61.2 percent of its loan book has a maturity of less than one year.
On capital; core capital stood at Sh2.3billion below the proposed Sh5bn by Treasury.
“The strategic sale of our business to I&M Holdings and the merger of its operations to I&M Bank represents tremendous value of its stakeholders and will enhance the offering to customers and employees and builds on Giros legacy of steady growth and competitive product offering,” commented GCBL Managing Director Sanjay Gidoomal.
I&M Holdings pre-tax profit rose 13 percent to Sh8.23 billion in 2014, helped by rising interest income.
The firm has total assets just under Sh190 billion as at June 30, 2015 and a customer base of over 150,000 people.
The firm’s net interest income rose to Sh10.40 billion from Sh8.89 billion in 2013, driven by a 22 percent jump in loans and advances to customers to Sh112.49 billion.
Earnings per share rose to Sh13.56 from Sh11.75.