Giro Bank Set to have Minority Stake in I&M Bank

Equities
On Tuesday’s trading session, the market was characterized by mixed trends as depicted by the market indices. The NSE All Share index inched up by 0.55% to close at 144.63 points from 143.84 the previous day. The NSE-25 share index followed suit, advancing marginally by 0.30% to close at 4114.05 points while the NSE 25 Share Index plummeted by 0.09% closing at 3797.74 points. Market Capitalization expanded marginally by 0.55% to close at KES 2,044.78 billion while equity turnover also revved up 17.14% to close trading at KES 0.934Bn. Market breadth favoured advancers as 19 stocks appreciated in price against 16 decliners.
Giro Commercial Bank has agreed to a KES 5 Billion in cash and share swap take over by I&M Bank (NSE: I&M), a deal that will see tier III Giro Bank owners have a 5.09% minority stake in I&M Bank. The acquisition involves a KES 2.5 Billion in cash and the rest settled with an issue of 21,023,330 million shares valued at KES 121.05 each on completion of the acquisition.
The move underscores I&M’s expansion strategy through acquisitions, having entered into Tanzania, Rwanda and Mauritius by wholly taking over a local bank or buying a majority stake. With only 1.9% of its loans in default versus the industry average of 8.2%, an average annual profit after tax of KES 500 Million and a sizable small and medium size customer base, Giro Bank deal is seen as a cost effective acquisition which is set to boost I&M Bank’s revenue even as it seeks to its local presence.
Equity Market Highlights
East African Breweries Ltd (NSE: EABL) was the most actively traded stock today accounting for 36.90% of the total market value traded activity. Equity Group Ltd (NSE: EQTY) also registered high levels of activity, accounting for 20.68% of the total market turnover. Pan Africa Insurance Holdings Ltd (NSE: PAFR) topped the gainers list, the second time this week, appreciating by 7.69% to close the day at KES 42.00. Kenya Airways Ltd (NSE: KQ) went up by 5.26% to close the day as the second best performer at KES 4.00.
Liberty Kenya Ltd (NSE: CFCI) emerged as the top loser of the day, plummeting by 7.10% to close at KES 14.40. E.A Portland Ltd (NSE: PORT) similarly lost ground by 5.71% to close at KES 33.00.
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