I&M raises buyouts budget to Sh10bn
Monday May 01 2023
The I&M Group board is seeking one-off shareholder approval to make up to $75 million (Sh10.2 billion) buyouts in future without requiring fresh approvals, pointing to the bank’s continued focus on growth.
The board has included the request as part of the agenda for the annual general meeting (AGM) slated for May 25 in a move that will give it more flexibility in acquiring other banks or entering mergers or joint ventures.
“Subject to all relevant regulatory approvals being obtained, the company be authorised to undertake an acquisition, a merger, enter into a joint venture agreement or set up a new (greenfield) venture where the value of such a transaction shall not exceed an amount of $75 million,” reads an AGM agenda.
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Top lenders, including KCB, Equity, Co-operative Bank of Kenya and I&M have in the recent past made acquisitions within Eastern Africa and remain open to more deals using their sustained profitability and strong capital levels.
A source familiar with the matter told the Business Daily that a nod from I&M shareholders will eliminate the need for the group to call for an extraordinary meeting to approve major transactions in future.
“The new limit gives the bank the ability to make a sizable acquisition. There is no buyout target at the moment but I&M is always looking for a good opportunity,” said the source.
The approval would help I&M speed up future deals at a time many other banks are also eyeing new acquisitions, especially within East Africa.
The lender which posted a 37.7 percent growth in net profit to Sh11.2 billion in the financial year ended December 2022 has largely relied on a mix of organic growth and acquisitions to grow from tier II to a large bank.
I&M in 2017 acquired Giro Commercial Bank through a combination of cash and share swap transactions valued at about Sh5 billion and followed up with the acquisition of a 90 percent stake in Uganda’s Orient Bank in October 2021 for Sh3.6 billion.
The Uganda deal gave I&M access to additional loans worth Sh7.7 billion, deposits (Sh18.2 billion), 70,000 customers, 14 branches and 22 ATMs.
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I&M in 2021 also rolled out micro, small and medium-sized enterprises banking offering in Rwanda, rolled out a wealth management unit and revamped digital offerings across all its banking subsidiaries.