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Press Release

I&M Bank Group’s posts 9% growth in 2016 after tax profits

21/03…Banking services group, I&M Bank Limited has announced a 9% after tax profit growth for its 2016 full year trading results.

Speaking following the release of the results, I&M Bank Kenya Chief Executive Officer, Mr. Kihara Maina noted the results were largely satisfactory given the severe operating environment the industry as a whole was facing.

He further pointed out that the core banking business of intermediation involving the pricing of risk was considerably impacted by the interest rate corridor which makes it a challenging environment for both customers and the bank.

While the group assets registered an impressive growth of 10.3 percent to close at Kshs 182.1 billion up from Kshs 165 billion, the firm’s pre-tax profit recorded a marginal rise of 3% growth to close at Kshs 9 billion up from Kshs 8.7 billion posted the previous year.

Increased customer lending accelerated the firm’s loan and advances book to Kshs 120.7 billion up from Kshs 114.9 billion representing a 5% growth.

The Group’s interest income generated from customer loans and advances including placements on government securities increased by an 11% margin to close at Kshs 21.7 billion up from Kshs 19.6 billion posted the previous year. The Group’s interest expenses however dropped by 5% to close at Kshs 8.2 billion down from Kshs 8.6 billion, primarily due to stability in interest rates. The deposit base grew by 11% to Kshs 129.6 billion.

On strategic direction of the Bank, Mr Maina pointed out that the bank was in the middle of undertaking comprehensive structural re-alignments to position the Group for future growth. He further added that, I&M Bank would take a cautious, informed approach in the way it reacts to the recent changes in laws affecting its business.

“We are pursuing several strategic initiatives that we believe will place the Bank in a better position to counter the various challenges arising from the current operating environment whilst taking advantage of existing opportunities as we endeavour to increase our shareholders’ value”, Maina said.

On the recent acquisition of former Giro Commercial Bank Limited (GCBL), the CEO added that the integration process of the two businesses is progressing well and plans have been finalised to ensure a smooth customer transition. GCBL will add on a proforma basis net advances of approximately Kshs 9.1 billion and deposits of Kshs 12.6 billion. I&M Bank has also acquired Giro Bank’s branch network, effectively pushing its branch footprint to 43 branches in Kenya.

Last year, I&M Bank Limited continued to expand its product portfolio by launching various products in line with the bank’s pillar on innovation. The bank launched I&M Karibu Account, a technology driven product, that enables real-time account opening through self-registration on the I&M App and at approved at I&M Karibu Agents. I&M Bank is also a pioneer member of the industry’s PesaLink system, a payments solution enabling I&M Bank customers to directly pay another bank’s customer in Kenya in real time, affordably and conveniently, through its branches and alternate delivery channels like mobile and internet banking.

Ends

I&M Holdings agrees to purchase entire issued capital of Giro Commercial Bank Ltd.

PRESS RELEASE

I&M Holdings Limited (“IMHL”) is pleased to announce that it has signed an agreement to acquire all of the issued share capital in Giro Commercial Bank Limited (“Giro”). The proposed acquisition, upon completion, envisages the immediate merger of Giro’s banking business into I&M Bank Limited (“I&M Bank”), IMHL’s flagship subsidiary. The proposed acquisition is subject to a number of conditions precedent including approvals under the Banking Act, from the Capital Markets Authority, from the Competition Authority of Kenya as well as from IMHL’s shareholders in general meeting.

The I&M Group – comprising IMHL, its banking entities in Kenya, Tanzania, Rwanda and Mauritius as well as GA Insurance Company Limited amongst others – is a leader in the financial services industry in East Africa with a significant presence in the banking, insurance, manufacturing and real estate sectors.

IMHL owns the Group’s regional banking entities in Kenya, Rwanda, and Mauritius and in Tanzania through I&M Bank. Listed on the NSE with a market capitalization of KES 45 billion, it is regulated by the Capital Markets Authority as well as by the Central Bank of Kenya as a non-operating holding company. Giro was established in 1997 following the merger of Commerce Bank Limited and Giro Bank Limited. Giro has more than 100 employees and seven branches in Nairobi, Kisumu and Mombasa.

Sarit Shah, Executive Director of I&M Bank, commented:

“The I&M Group has undertaken a series of strategic acquisitions in the banking sector in East Africa and Mauritius since 2008. Continuing on this path, the proposed acquisition of Giro represents an opportunity to acquire a strong banking entity for the I&M Group to not only expand, and diversify its customer base but also to simultaneously give an instant boost to its human resources capacity.”

Sanjay Gidoomal, Managing Director of Giro, commented:

“In I&M Holdings Limited and I&M Bank we have found the right partner to deliver significant value for our customers, our employees and all our stakeholders . Giro’s view is that the strategic sale of its business to I&M Holdings and the merger of its operations into I&M Bank represents tremendous value for its stakeholders, and will enhance the offering to customers and employees and builds on Giro’s legacy of steady growth and competitive product offerings. We expect that customers will benefit from additional services and product lines and will embrace I&M Bank as a strong banking partner with a regional footprint. Giro’s employees will benefit from increased career opportunities and a chance to join a rapidly growing dynamic local player in Kenya’s banking market.”