KENYA – I&M Holdings, a conglomerate comprising financial service providers, says it has invested an additional US$180 million (Sh1.8 billion) in its fully-owned Kenyan subsidiary whose operations expanded following the acquisition of Giro Commercial Bank.
The Nairobi Securities Exchange-listed firm made the additional investment in I&M Bank Limited — its largest operating unit — in the year ended December according to disclosures in its latest annual report.
The capital injection saw its cumulative investment in the subsidiary, which in turn owns I&M Insurance Limited, I&M Bank Tanzania Limited and Youjays Insurance Brokers, rise to US$I98 million (Sh19.8 billion) from US$179 million (Sh17.9 billion) in 2017.
The Kenyan banking subsidiary took over Giro’s employees, clients, properties and five branches in Nairobi and Mombasa as part of the cash-and-stock buyout of the small lender.
I&M paid Giro owners US$250 million (Sh2.5 billion) in cash in addition to 21 million shares in I&M Holdings, reports Business Daily.
The banking group said the merged operation remained well-capitalised and recorded growth in profits and loans in the review period, adding that its major challenge was the rise in defaults.
“However, due to significant market challenges experienced in 2017/2018, non-performing loans increased by 15 percent during the year,” I&M said of the subsidiary.
“The bank is closely monitoring this matter and is confident that the non-performing loans will decrease over time in line with the prospects of economic recovery.”
I&M Bank reported a net profit of US$630 million (Sh6.3 billion) in the review period compared to US$540 million (Sh5.4 billion) the year before.
In May this year, the International Finance Corporation (IFC) unveiled that it will invest $37.5 million in Mauritius-based Bank One, in which the group holds a 50% stake.
IFC said that the credit facility, classified as a senior loan, was to enable the financial institution to increase lending to small businesses and support its expansion.
“The IFC loan will strengthen the bank’s long-term funding position and support the expansion of its lending operations to SMEs,” IFC said.
Bank One is a joint venture between I&M and CIEL Group, which is based in Mauritius. Its indirect owners also include the family company Minard Holdings via I&M, and the investment group Amethis Finance via CIEL.