I&M Holdings PLC, Kenya’s ninth bank by assets has announced plans to acquire a 90 percent stake in in Orient Bank Uganda.
In a cautionary announcement issued on Monday, the lender said: “Shareholders of I&M Holdings Plc are advised that the company has on the 17th July 2020 entered into an agreement with the shareholders of Orient Bank Limited for the sale and purchase of incorporated shares comprising 90 percent of the issued share capital of Orient Bank Limited.”
Although the terms of the transaction were not disclosed, the deal requires approval from the Central Banks of Kenya and Uganda, the Capital Markets Authority, and company shareholders I&M said.
I&M Holding operates in five countries – Kenya, Tanzania, Rwanda, Uganda and Mauritius through its subsidiaries, affiliates and joint venture investments in each of these countries.
Orient Bank recorded losses of Ushs 1.1 billion (Kshs 30.8 mn) in FY’2019 from profits of Ushs 5.6 billion (Kshs 162.2 mn) in FY’2018, while its book value stood at Ushs 114.1 billion (Kshs 3.3 billion) in FY’2019.
The 2019 performance was mainly driven by an increase in the Total Operating Expenses to Ushs 97.2 bn (Kshs 2.8 bn) in FY’2019 from Ushs 81.6 bn (Kshs 2.4 mn) in FY’2018, largely driven by a 172.6% increase in Loan Loss Provisions to Ushs 17.9 bn (Kshs 523.7 mn) in FY’2019, from Ushs 6.6 bn( Kshs 192.1 mn) in FY’2018.
The Banks Total Operating Income also declined by 2.0% to Ushs 87.7 bn (Kshs 2.56 bn) in FY’2019, from Ushs 89.5 bn (Kshs 2.61 bn) in FY’2018.
Once concluded, this will be the third bank acquisition in 2020 after the CBK gave a go-ahead to Nigerian lender, Access Bank PLC to acquire 100.0 percent stake in Transnational Bank PLC and the 90.0 percent acquisition of Jamii Bora Bank by Co-operative Bank.