This archive report was first published on 20 July 2020.
July 20, 2020 - I&M Bank, a leading Kenyan lender, is making significant strides in its regional expansion plans with the proposed acquisition of Orient Bank, a mid-tier lender in Uganda.
The acquisition, which will see I&M Bank acquire a 90% stake in Orient Bank, is subject to several conditions, including receipt of all regulatory and corporate approvals from the Central Bank of Kenya, the Bank of Uganda, the Capital Markets Authority, and the shareholders of I&M Bank in a general meeting.
According to I&M Bank's disclosure, the proposed transaction is expected to have a material effect on the trading of its shares at the Nairobi Securities Exchange (NSE).
Orient Bank, which has an asset base of Ush814 billion (Ksh23.69 billion) as per its audited 2019 financial results, posted a net loss of Ush1 billion (Ksh30.6 million) in the financial year ended December 31, 2019.
Notably, I&M Bank has been ranked as the most attractive lender at the Nairobi Securities Exchange (NSE) by Cytonn Investments, citing strong franchise value and intrinsic value score.
“We note that asset quality deteriorated in Q1’2020 with the gross NPLs (Non-Performing Loans) ratio increasing by 0.9 percent points to 11.3 percent from 10.4 percent in Q1’2019, this was high compared to the 5-year average of 8.5 percent,” said David Gitau, an investment analyst at Cytonn Investments.
