The acquisition sees I&M take 90% of the bank from UK-based investment group 8 miles LLP and Morka Holdings Limited, a financial company registered in Mauritius.
A Kenyan banking
group, I&M Holdings has entered the Ugandan market with the acquisition of
Orient Ban Ltd, the 12th largest in Uganda.
The acquisition sees
I&M take 90% of the bank from UK-based investment group 8 miles LLP and
Morka Holdings Limited, a financial company registered in Mauritius.
I&M and Orient Bank signed
the acquisition agreement in July 2020, which was completed last month, after
receiving the necessary approvals from the Central Bank of Kenya, Bank of
Uganda, Capital Markets Authority of Kenya and the COMESA Competition
move underscores I&M Group’s commitment to its growth and expansion
strategy in Eastern Africa, where Uganda was the missing link in the Group’s
strategic effort to set up its presence in all East African countries,” says a
statement by I&M.
The company has operations in Kenya, Mauritius
and now Uganda.
Last week, there was panic among customers, after a rumor that the bank was closing at end of the month. Calm returned after
Orient dismissed the rumour, but said they were closing three branches in
Mbarara, Gulu and Mbale.
The closure of the branches was a reflection of the developments in the
banking sector as commercial banks are reducing their branch networks to cut
costs. Banks are becoming more reliant on agency banking which has
seen Ugandans able to access services at 10,000 agencies, up from less than 600
branches four years ago.
I&M says their key focus of this strategy
is to seek opportunities to invest at a local and regional level enabling the bank
to serve the needs of all customers, while promoting trade flows within the
development supports the Group’s Business growth initiatives through
diversification of revenue streams by entry into new markets and extension of
its Corporate, Business, Personal Banking, as well as Treasury and Trade
Finance solutions, to all its customers operating in Uganda.”
I&M now joins Equity, KCB, ABC, DTB, NCBA and NC Bank as the other Kenya-based
banks with operations in Uganda.
Executive Director, Sarit Raja Shah says, “The acquisition of OBL will place
I&M Bank in an advantageous position to capitalise on the growth in the
Eastern African economies and thereby ultimately increasing shareholder value.”
is expected to give the Group greater capacity to grow profitably, through
extending our network to our Regional customers. Further it demonstrates our
continued leadership role in the industry across East Africa,” Sarit Raja Shah added.
With the acquisition, I&M takes over loans worth Ushs 255b, and
customer deposits worth Ushs 603b held by Orient at its 14 branches countrywide. The bank also has a customer base of 70,000 and a staff component of
340 employees, according to Kumaran Pather, Orient Bank CEO.
I&M Group says they prefer to make mergers and acquisitions as
opposed to starting a new entity. “The I&M Group will continue to focus on mergers and acquisitions
as part of its growth strategy, as we continue to enhance our shareholders’
value and to provide our customers with a wide network of banking solutions
across the region.”
Other acquisitions it has completed previously include I&M
Burbidge Capital Limited, a financial advisory company in Kenya and Uganda, Giro
Commercial Bank Limited in Kenya, CF Union Bank in Tanzania, BCR Bank in Rwanda
and First City Bank in Mauritius.
Shah, noted, “Uganda has made great strides in improving access to financial
services across the country. The partnership with Orient Bank Limited is very
timely since the Group plans to play a significant role in the growth of the
banking sector in Uganda, as it has done in other East African markets.”