I&M Holdings acquires Giro Bank for Sh5.09bn

June 6, 2016
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The Sh5.09 billion represents about 11 percent of I&M Holdings’ market capitalisation using the acquisition price/FILE
The Sh5.09 billion represents about 11 percent of I&M Holdings’ market capitalisation using the acquisition price/FILE

, NAIROBI, Kenya, Jun 6 – I&M Holdings has disclosed transaction value of acquiring Giro Commercial Bank Limited (GCBL), a tier three bank at Sh5.09 billion.

The Sh5.09 billion represents about 11 percent of I&M Holdings’ market capitalisation using the acquisition price.

Compared to previous cash based acquisitions, I&M Holdings will pay by way of cash Sh2.55billion and issue of 21.04million shares at a price of Sh121.05.

This marks the first acquisition for I&M Holdings in Kenya.

Based on first quarter of 2016 numbers, I&M Holdings will acquire a loan book of Sh9.2billion which is about 7.2 percent of I&M’s loan book and deposits of Sh13.2billion about 9.9 percent of I&M’s deposit book.

GCBL had a gross Non Performing Loan ratio of 1.9 percent as at the first quarter of 2016 – much lower than the overall industry ratio of 8 percent.

I&M Holdings will also acquire seven additional branches raising its total count in the country to 42.

GCBL’s estimated annual profit before tax is about Sh500 million.

I&M Holdings expects to have cost savings of about Sh60 million annually.

Overall, GCBL will be held under I&M Bank Kenya- a key subsidiary of I&M Holdings.

An Extraordinary General Meeting will be held on June 27 2016.

According to Standard Investment Research Bank, the acquisition will have minimal strategy disruption given similarities of the two banks – both have conservative balance sheets and mainly target middle to high income customers as well as Small and Medium Enterprises (SMEs).

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