I&M Bank to acquire 90% stake in Uganda’s Orient at Ksh2 billion
Uganda’s Orient Bank Limited is set to sell its 90 percent stake to I&M Holdings at Ksh2 billion.
The deal started in 2014 when I&M in pursuit to grow its diversification in the region spurring rivalry with the likes of KCB Group and Equity Group.
The deal will add to its regional banking operations comprising Kenya, Rwanda, Tanzania and Mauritius.
“Shareholders of I&M Holdings Plc are advised that the company has on July 17, 2020 entered into an agreement with the shareholders of Orient Bank Limited for the sale and purchase of shares comprising 90 percent of the issued share capital of Orient Bank Limited,” I&M said in a notice.
“Further details of the transaction will be made available to the shareholders of the company in due course.”
Reports in a local daily indicate that I&M aims to complete the transaction later this year and is expected to pay more than Sh2 billion for the controlling stake.
The deal is subject to regulatory approval from both Kenya and Uganda central banks and the Capital Markets Authority.
Orient Bank reported a net loss equivalent to Ksh30.6 million in the year ended December 2019 when its shareholder funds or book value stood at Sh3.3 billion.
Orient Bank’s major shareholders include its vice chairman and founder Ketan Morjaria.
I&M currently runs a corporate finance advisory business, I&M Burbidge Capital, in Uganda and acquisition of the bank will expand its operations in that market.
Other Kenyan banks with a regional presence include DTB, KCB, Equity that have expanded in Eastern Africa to grow their earnings and reduce reliance on the Kenyan market.
I&M’s move underlines the growing quest among local lenders for a bigger presence in the regional market where uptake of financial services is lower than Kenya.